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Debt Collectors' lllegal Tactics Targeted

Bad actors make threats, try to collect on fake debts

Woman finds out about a fraud by the phone.

Dobrila Vignjevic/Getty Images

In announcing a nationwide crackdown on debt collectors’ illegal tactics, officials said Tuesday that some have threatened bodily harm, deportation and arrest — and even tried to collect fake debts.

Officials from the Federal Trade Commission (FTC) joined New York's attorney general in announcing Operation Corrupt Collector. Sixteen states were part of the law enforcement sweep to put illicit debt collectors out of business.

"They'll use abusive and threatening language, profanity and racial slurs, and relentless call after call to intimidate and humiliate people into paying up,” Andrew Smith, who directs the FTC's Bureau of Consumer Protection, told reporters on a conference call. “This is illegal. It injures consumers and also those legitimate debt collectors who are trying to do things by the book."

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New York Attorney General Letitia James added: “For every abusive debt collector that gets caught using devious means to an end, we save numerous victims from the grasp of their illicit harassment and intimidation.” She said there was a focus on tactics deployed against older adults and other vulnerable groups.

Often, bad actors disguise their identities using call spoofing, which lets them hide their actual phone numbers and masquerade as sheriffs, local government officials, attorneys and process servers, Smith and James said.

In addition to scare tactics, some debt collectors badger people for debts that they are not authorized to collect, they added. And though Social Security may be garnished for certain debts such as federal income taxes (but not credit cards or auto loans, for example), that's another tactic used by the bad actors.

FTC fields thousands of complaints from victims 50 and older

The crackdown encompassed more than 50 enforcement actions against debt collectors engaged in these illegal practices brought by the FTC, three federal partners and partners from 16 states. The states are Arizona, California, Colorado, Connecticut, Florida, Idaho, Illinois, Indiana, Massachusetts, New Mexico, North Carolina, North Dakota, New York, Ohio, South Carolina and Washington.

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“If a collector starts making threats, that is illegal and you should hang up. And particularly senior citizens … they've earned the right to hang up and to be rude."

— New York Attorney General Letitia James

As of last week, the FTC's Consumer Sentinel Network online tool has received more than 85,000 reports so far this year from consumers about debt collection. Nearly 45 percent of the complaints related to either debts the consumer did not owe or to abusive and threatening practices, the agency said. This state-by-state breakdown will be updated quarterly, FTC spokesman Jay Mayfield said.

The age of the complainants to date was gathered by the FTC in less than 26 percent of the complaints. Of those cases, people 50 and older made 7,443 complaints, while those 49 and younger reported 14,460 complaints.

According to Smith, none of the debt collectors taken to task in Operation Corrupt Collector targeted older Americans, per se, but all contacted them while doing business.

Smith and James underscored the importance of knowing the red flags and filing a complaint when you've been wronged. To make a complaint, go to

The officials also thanked AARP for working with their agencies to educate consumers on these issues. Smith called the partnership “hugely important” and said it had “paid enormous dividends for the FTC and for consumers more generally."

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