Credit Infocenter

Debt Collectors Top List of Consumer Complaints for 2008

September 14th, 2009 · 4 Comments · Collection Agencies, Debt Collection

by Kristy Welsh

(Last Updated On: February 13, 2017)

I know this may come as an unbelievable surprise to many of you (yeah, right) but an annual survey conducted by the National Association of Attorneys General (NAAG) once again placed debt collection agencies at the prestigious top position for consumer complaints for this past year.

It isn’t that we here at creditinfocenter are picking on the debt collection industry, but it seems they do such a good job consistently providing us with “interesting facts” and topics to write about!  But I will admit the news does have a bit of irony to it — a group of lawyers conducting a (non-scientific) survey each year on consumer complaints — while they as an industry group likely have the top spot as far as being the butt of all jokes!

But temporarily putting humor aside, the lawyers aren’t the only ones who are pointing the fingers. Taken directly from the Federal Trade Commission’s website, “Debt collectors generate more complaints than any other industry.” Need we say more?

The State Attorneys General is considered a leading consumer protection force in this country, and they are responsible for enforcement of consumer protection laws within their individual state. Consumer protection statutes exist in each state which prohibit certain deceptive practices, fraudulent activities, misleading advertising, and many other areas. The Attorneys General can and will take action against businesses including those that operate online that violate the statutes.

Each year data on consumer complaints obtained from the offices of the Attorney General and is tallied by the NAAG Consumer Protection Project, and released to the public.  From this report released August 31, the National Top 10 Consumer Complaints List for 2008 is:

  1. Debt Collection
  2. Auto Sales
  3. Home Repair/Construction
  4. Credit Cards (tie)
  5. Internet Goods and Services (tie)
  6. Predatory Lending/Mortgages
  7. Telemarketing/Do-Not-Call
  8. Auto Repair
  9. Auto Warranties (tie)
  10. Telecom/Slamming/Cramming (tie)

The top three spots were unchanged from the prior year, with auto sales and home repair and construction holding their positions behind debt collection. Not surprisingly, there was an increase in the number of complaints related to foreclosure, debt reduction and loan modification type scams where upfront monies were collected from unsuspecting victims. Additionally, complaints about unauthorized credit and debit card charges as well as incorrectly assigned late fees were on the increase.

Has anybody ever placed a complaint with the state Attorneys General office that would like to share their experience? If so, leave a comment!

The contact list of state Attorneys General offices can be found at http://www.naag.org/attorneys_general.php

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4 Comments so far ↓

  • Kristy

    Ya now, I think it IS that we pick on debt collectors. At least I do. 🙂

  • miss debtor

    if you have money to settle, they love you!!!!!!

  • Kristy

    They’ll still try and coerce you into paying top dollar. Don’t fall for it.

  • smi

    You get a credit card and don’t pay for it; the lender sends you an intimation in writing and waits; if you don not respond he calls you over the phone asking for a payment or at least for a committment to pay; if it is the lenders lucky you decide to pay,graciously and apologise for the delay; normally the debtor opts for the latter or worst of all refuses to pay at all citing the high interest rate and late fees being unjustly assessed by the lender(which for some uncanny reason was not the area of concern for quiet some time); if there are no other reasons for concern then the lender tries to make the debtor realise that without the fear of a substantial late fees and spurt in the apr most debtors would not bother to pay at all;would that not be unjust to all those who have religiously maintained an unscrupulous payment history; if you do not relent than the lender in most cases waives the late fees and if within his purview also promises to reduce the interest rate if the debtor maintains due diligence henceforth; if neither prove to be effective than the debtor has the option to close the loan by paying it off via a balance transfer to another creditor with a lower interest rate or settles the debt with the original creditor after negotiaiting a compromise.

    During the rigamarole the lender, if not for the sake of empathy then at least for the sake of the stringent FDCPA, is at his best behaviour, still hoping to recover at least a portion if not the whole sum of the debt.
    If the debtor continues to default and places a concession on the interest rate as a prerequisite for further payment than in most cases(especially in the case of an unsecured debt i.e., credit card debt)the debt is sold off to a seasoned 3rd party bill collector for a pittance;the entire process usually takes a time frame of a 180 days during which the debt is still within the manifold of the original lender.

    The higher the magnitude of the charged off debt the higher will be the pressure on the lender to make up for the same via an interest rate hike which may seem grossly unjust at an individual level but makes more sense at a macroscopic perspective.

    Gone are the days when the powerless commoners were at the mercy of loan sharks, coerced into submission.Leave aside threaten if the collector even marginally defaults by not restricting himself to the norms of the regulatory laws, then he risks the possibility of an expensive lawsuit, not to mention the ire of an entire middle class already pushed to the zenith, by an economy in doldrums.In such instances the primary lender ends up paying more then what he was to expecting to receive.

    Being a 1st party collector myself,I deem myself no different then the millions of others trying to eke out a living.Beleive me the collector is always at the receiving end and has to cope with a barrage of expletives and insults from the very those who amazingly have the audacity to claim recompense for being harrased.Do these “victims”even realise that the one at the receiving end of their ire is just another human being like them and not some monstrosity of a species deriving sadistice pleasure in the misery of others; my job is to grin and bear it realsiing that even an inkling of a retaliation can jeopardise my job.No one likes to be insulted and yelled at.

    If the debtor is in genuine strife and is simply a victim of circumstances than I have always, just like my countless other peers,gone out of the way to lend a helping hand offering solace not just through words of empathy but also through actual deeds,thanks to the much hated lender; an entity touted as “the mother of all evil”by the sensationalism seeking papparazzi.

    And now for the surprise of suprises; how many of us are even aware that every lender has an entire regiment of well trained professionals(most of whom are extremely humane)who realise that it is in the best interests of the lender as well as the debtor to chalk out an amicable strategy of compromise.They accomplish the same by, beleive it or not, significantly compromising on not just every debtors severest of concerns, the much hyped about interest rate, but also by instilling a sense of self worth and esteem in those who have been unjustly delt out a raw deal by the ravages of time and tyrant, the tyrant in this case definitely not being the creditor whose very existence depends on maintaining a relationship of mutual good will and respect.

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