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Collectors Tar Credit Report Unreasonably, Other Abuses on the Rise

By Faye Mergel
Published: Thursday, December 3rd, 2009

Memphians, along with an increasing number of Americans across the country, complain that debt collectors are becoming more and more aggressive, often engaging in shady practices which possibly violate their rights as consumers. Some complained that collectors are placing negative items on their credit report unreasonably, giving them additional burdens during the tough economy.

Collectors Tar Credit Report Unreasonably, Other Abuses on the RiseAccording to federal authorities, complaints about unscrupulous debt collection practices went up by six percent within two years. The Federal Trade Commission received 228,000 complaints against debt collectors from 2007 to May this year.

In Memphis, 800 consumers filed formal complaints against abusive debt collectors during that period, 250 involving errors with the debt being collected from them and 75 involving calls from to the borrower’s employer.

Analysts say there are other reasons why the number of complaints has risen. This includes the skyrocketing for debt resales in the market, lax requirement for debt collectors, and the growing number of people getting behind on their debts.

However, consumer advocacy groups maintain that the aggressive practices of debt collectors are the main driving reason for the rise in complaints. Maryland lawyer Jane Santoni says debt collectors have increasingly harassed consumers during recession.

Santoni notes that unscrupulous collectors often misrepresent debts, contact borrowers repeatedly, and do not send written notices, adding that such practices are forbidden by law. Consumer advocacy groups believe debt collection companies continue their abusive practices since they face scarce threats if they are found guilty of violating consumer rights. After handling more than 50 cases involving disputes with debt collectors, Santoni says such malpractices must be stopped.

Many consumers complain that debt collectors contact them repeatedly, at times during hours prohibited by law. A recent survey reveals 30 percent of borrowers or their family members were contacted by collectors before 8 a.m. or after 9 p.m., which prohibited by law. There are also consumers who complain that collectors give out wrong information to the credit bureaus.

Hazel Park, Mich. resident Jerry Shields says a collection company tarnished his credit report after claiming that he was not able to pay a medial bill worth $85. Shields never knew about the bill.

Specialists explained that erroneous items on a credit report could make a consumer’s financial life more difficult, since it will adversely affect his ratings which banks and creditors use to make decisions when he applies for any line of credit.

Consumers who believe that there are erroneous items on their credit report are advised to contact their lenders and the bureaus immediately to prevent further damage to their account.

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