Not surprisingly, the quality of information that debt buyers obtain is often extremely poor. “Collecting Consumer Debts: The Challenges of Change: A Federal Trade Commission Workshop Report (February 2009),” pp. iii-iv, states:
“The FTC believes that there are currently two major problems in the flow of information in the debt collection system. The first major problem is that debt collectors have inadequate information when they seek to collect from consumers. This increases the likelihood that collectors will reach the incorrect consumer, try to collect the wrong amount, or both. . . . A related information problem is that the limited information debt collectors obtain in verifying debts is unlikely to dissuade them from continuing their attempts to collect from the wrong consumer or the wrong amount. If a consumer disputes a debt, the collector is required to obtain verification of the debt and provide it to the consumer before renewing its collection efforts. Many collectors currently do little more to verify debts than confirm that their information accurately reflects what they received from the creditor. This is not likely to reveal whether collectors are trying to collect from the wrong consumer or collect the wrong amount. The FTC therefore concludes that collectors need to do more to increase the likelihood that the information they acquire during the verification process will correct errors. . .”
Based on problems such as the documentation and multiple lawsuit issues above, the federal government describes the current debt collection system as "broken." In 2010, the federal government stated:
Based on its extensive analysis, the Federal Trade Commission ("FTC" or " Commission "), the nation's consumer protection agency, concludes that neither litigation nor arbitration currently provides adequate protection for consumers. The system for resolving disputes about consumer debts is broken … because consumers are not adequately protected in either debt collection litigation or arbitration.
This writer concurs with the conclusion reached by the Federal Trade Commission that "the current system is broken" and that substantial reforms are needed.
Collaborative Writing by Rex C. Anderson, Esquire and Contributing Research/Writing by Kellye S. Smith