Debt collectors' professional association waging campaign to be paid respect

6/19/2011

EDINA, Minn. -- As a longtime debt collector, Lesllie Rogers has been routinely insulted, pummeled with obscenities, crudely propositioned, and threatened with violence by the people she calls.

"They want you to feel as small and insignificant as possible," she said. "The guy who sits across from me just was threatened with getting his legs and arms cut off."

Debt collectors like Ms. Rogers are well aware that they are not a sympathetic lot. But now they are saying enough is enough. The trade association that represents them is engaged in an unlikely charm offensive to change their lowly image while also trying to shape the rules that govern them as they face the prospect of a tough new regulator.

These are boom times for collection agencies, which have been swamped with work as many Americans gorged on debt and then struggled to repay it. But the industry has come under fire for pushing too hard. Last year, 140,036 complaints were filed against debt collectors, a 17 percent increase over the previous year, according to the Federal Trade Commission.

The complaints told of menacing late-night phone calls and threats of jail time or confiscating a house. In one instance a jury awarded a Texas man $1.5 million after a debt collector left voice-mail messages using vulgarities and racial slurs.

Those are the exceptions, the industry's trade association says.

Mark Neeb, the association's incoming president, insisted that most debt collectors are tired of being defined by the worst members of their profession.

"There really ought to be a law on how consumers behave toward debt collectors," said Mr. Neeb, whose employees routinely use aliases on the phone to protect their identity from hostile debtors.

After several years in which the overzealous tactics of debt collectors have been the focus of regulators and media alike, ACA International (Association of Credit and Collection Professionals) has beefed up its lobbying operation in Washington to pursue a wish list of laws and regulations that it would like changed.

To more fully explain the profession to the public, the association has set up a Web site called askdoctordebt.com that lets consumers ask questions in a "Dear Abby" style format.

Until now, the profession has been regulated by the Federal Trade Commission, which had the ability to crack down on rogue collectors but could not write rules and regulations for the industry.

But soon it will fall under the supervision of a new regulator, the Consumer Financial Protection Bureau, which will have that authority.

Foremost on the debt collectors' agenda is updating the Fair Debt Collection Practices Act, which was passed in 1977 and has not been changed much since. ACA International, based in suburban Minneapolis, wants its members to have the ability to contact debtors using modern technology, including e-mail, cell phones, and autodialers, all of which create problems under the current rules.

In addition, the group wants regulators to specify language that debt collectors may use when leaving a voice message, something that is now the subject of thousands of lawsuits each year against the industry.

A common criticism of debt collectors is that they pursue debts with little paperwork to back up their claim.

As a result, the association is recommending that the law be amended so that creditors would have to maintain account information on their customers for at least seven years.

ACA International leaders said they support efforts by regulators to crack down on debt collectors who do not follow the rules.

The top complaints last year were for calling repeatedly, misrepresenting the amount or status of the debt, and failing to send consumers a required notice about the debt and their rights.

Linda Russell, the owner of a collection agency based in Wyoming called Collection Center, said it was simply more effective to work with consumers "rather than yelling and swearing."

But the decorum needs to flow both ways, said Ms. Rogers, the Minnesota collector whom debtors know as Melissa Burg, a name she pulled from a phone book.

"Instead of playing games," she said, "just admit that you don't have money and we'll go from there."