NEW YORK (AP) – Those mysterious debt collectors who call insisting you’ll be in legal peril if you don’t pay them big bucks are in hot water themselves, accused in a nationwide crackdown of harassing and threatening consumers, often about debts that don’t actually exist.
The Federal Trade Commission on Tuesday highlighted enforcement actions filed in recent months against two South Carolina-based debt collection firms accused of bilking people out of a combined $17.2 million, as well as settlements with three other firms accused of using pressure tactics and other shady practices.
Ironically, the firms that agreed to financial settlements were unable to pay the full amounts.
While consumer complaints about debt collectors have dropped slightly since the start of the coronavirus pandemic in March, the commission’s consumer protection chief, Andrew Smith, anticipates that will change as collectors increasingly target people experiencing crisis-related financial hardship.
Of more than 85,000 debt collection complaints from consumers this year, the FTC said nearly half pertained to debts that didn’t exist or to abusive and threatening practices.