Debt collection is serious business and many creditors hand off accounts to third party collection companies. Despite federal regulations of debt collection practices, many companies are still violating the rules and taking advantage of consumers. As the troubles increase, so do the number of lawsuits being filed against such companies and the number of companies being forced out of business as a result of inappropriate practices.
The Federal Trade Commission has seen a significant increase in the number of debt collection companies operating without a license. In efforts to avoid federal and state collection laws, companies are beginning to operate as an out-of-state agency whose license is supposedly registered in that other state. What ends up happening is that the company is not registered or licensed anywhere leaving them free to operate unregulated, at least until they are discovered.
This week West Virginia Attorney General Darrel McGraw filed a lawsuit against seven debt collection agencies that are allegedly operating without a license. Accused of engaging in unfair and abusive tactics to obtain money from unsuspecting consumers, these companies were attempting to collect on debts that are essentially non-existent. These seven companies will be facing legal troubles in addition to being investigated, and possibly shut down, by the Federal Trade Commission.