The Shocking Truth about the Debt Collection Industry
Who likes being in debt? No one. So it’s hardly a surprise that the general public vilifies the debt collection industry – an practice that seems to thrive on kicking you while you’re down.
In fact, ABC News reported last year that, “Debt collectors generate more complaints to the FTC (News - Alert) than any other industry, according to government agency. Last year, there were 144,159 filings against collection companies, the second largest category of complaints to the FTC.”
Here’s the problem: That report is a lie.
Forbes chalks this up as "lazy journalism," and scolds not only ABC News, but the Wall Street Journal, the New York Times and the Huffington Post (News - Alert) for inaccurately depicting the industry, in a recent article entitled, "The Facts behind the Fantasies about Debt Collection Complaints."
Forbes discovered that the Assets Receivable Management (ARM (News - Alert)) industry filed a Freedom of Information Act request with the FTC, asking them to send data regarding complaints filed against businesses in the industry before January 2012.
Using this data, Forbes identified 1,833 out of 4,599 debt collection that received complaints within a two-week period, each company averaging about 2.5 complaints each.
Forbes not only discovered that the majority of the complaints were illegitimate – meaning there were no laws violated – but that the average of 2.5 complaints against the 1,833 agencies, stemmed from out of 19,230,769 contacts. The ARM industry was grateful for Forbes discovery, and the Enhanced Recovery Company issued a press release following.
“In the first quarter of 2012, we managed a portfolio of 19 million accounts, made over 150 million calls and sent over two million letters,” According to the Enhanced Recovery Company. “We feel that the number of complaints received was well within an acceptable range of 0.0003 percent of our active inventory. Despite this, every complaint received is investigated fully by our risk management team…Additionally, we have a quality assurance team that monitors consumer contact on a daily basis to ensure that behaviors that would lead to a poor customer experience are identified and addressed through coaching and development.”
Despite this revelation that the press has contrived negative statistics impairing the reputation of the debt collection agency, there were certain businesses within the industry whose actions were so egregious it casted a shadow over the industry as a whole.
Moreover, headlines such as “Notorious Debt Collection Agency Pursued by Congress and the Press” grab more people’s attention than headlines that read, “Collection Agencies PayVeteran’s Tuition.” And nothing gives people more satisfaction than reading negative publicity associated with their perceived villains.
But as the Enhanced Recovery Company has accepted, “Due to the nature of the work, we cannot expect to satisfy everyone.”
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Edited by Braden Becker