What’s the connection between debt collection companies and bankruptcy?
Actually, the nexus is about as tight and interconnected as it can possibly be for many cash-strapped and beleaguered consumers. For high numbers of individuals and families in California and across the rest of the country, serious financial difficulty often starts with hyper-aggressive tactics of debt collectors aimed at collecting money that is allegedly owed.
That word “allegedly” is purposefully inserted, because stories regularly emerge indicating that some of the debt pursued by collectors is highly suspect.
Put another way: It is sometimes unverified. On other occasions, the material details — including the amount stated to be owed and the identity of the debtor — are flatly incorrect.
The federal Consumer Financial Protection Bureau is on the lookout for such things, with the organization’s director recently spotlighting two collection agencies that the CFPB states have used deceptive and unlawful practices to collect so-called “bad debt” from consumers.
Those entities — one of them, the Encore Capital Group, being a San Diego-based company — “have threatened and deceived consumers to collect on debts they should have known were inaccurate or had other problems,” said CFPB Director Richard Cordray recently.
The collection companies will now pay for that behavior, with a settlement they recently inked with the CFPB mandating that scores of millions of dollars be refunded to consumers and that the companies cease future efforts to collect on nearly $130 million of debt they were aggressively pursuing.
Consumer debt is often — and quite understandably — a central catalyst that progressively fuels financial difficulties for many individuals. A debtor who is increasingly viewing economic challenges as insuperable might reasonably want to contact an experienced bankruptcy attorney with a proven record of assisting clients with serious debt-related problems.
Source: CNN Money, “Debt collectors ordered to refund millions to consumers,” Kathryn Vasel, Sept. 9, 2015