Industy Reform

Consumer advocates say that unless the FTC institutes tougher punishments, efforts to curtail debt collection abuse are merely cosmetic. "The penalties aren't big enough or tough enough," says Steve Tripoli of the National Consumer Law Center.

But collection industry officials disagree. "Under the Fair Debt Collection Practices Act, consumers have a cause of action that entitles them to actual damages and attorney fees," said Andersen. "The industry believes that provides consumers with very strong protections and remedies."

Tripoli is skeptical about consumer protection laws being strengthened in the near future. "We can't play offense in this legislative environment because the forces of industry in Washington right now are more strongly aligned, sometimes on both sides of the aisle," he said.

Andersen says the claim that the collection industry is trying to undermine legislation designed to protect consumers is "shocking, in light of the work we have done with consumer groups over the past two years." She says in 2003, her association strongly backed passage of a bill (HR 3066) that called for clarification of various provisions of the Fair Debt Collection Practices Act. The bill has not yet been passed, and Andersen looks forward to continuing to work with consumer groups to achieve passage of a bill in the 109th session of Congress that is mutually satisfying to all parties.

The bill, which has received bipartisan support, says Andersen, requires debt collectors to submit the same written notice of consumer rights to all consumers. Collectors are required by law to send this notice to consumers within five days of their initial contact with the consumer. Andersen says that the majority of "frivolous lawsuits" filed against collectors are based on disputes regarding the language of this written notice.

"We would resolve hundreds of consumer complaints if everyone used the same notice," Andersen says.
As for the Glenn family, Darlene says that thanks to help from a credit counselor and a favorable settlement against the debt collector, the couple is "back on our feet." "We don't claim to have made all the right decisions," she says, but "we're rebuilding good credit and life is totally different now."