FTC Leader Speaks to ACA Convention on Workshop, Complaints

One of the leaders of the FTC’s unit that oversees the financial services industry told attendees of the ACA’s annual convention that the ARM industry has a lot of work to do in combating consumer complaints, but that she is encouraged by recent commitments by the industry to improve and hopes that the FTC’s planned workshop on debt collection will help.

Peggy Twohig, Associate Director of the FTC’s Division of Financial Practices, spoke to the collection industry yesterday about rising consumer complaints and the FTC’s upcoming debt collection workshop, scheduled for October 10-11. In a presentation entitled “An Inside View of the FTC,” Twohig explained that the recent surge in consumer complaints against collectors prompted the workshop. The FTC also wants to get a better idea of how collection agencies are operating now and how the FDCPA applies to today’s collectors.

“The FDCPA is 30 years old. It’s time we took stock of it,” Twohig said. Twohig also said that the FTC is looking for a better understanding of the industry and wants to get in a better position to appreciate the changes that have occurred in the collection industry in the past 30 years.

Twohig told attendees that the FTC will be focusing on new technology at the conference — such as autodialers, cell phones, and scoring software – as well as looking at debt purchasing practices, collection techniques, and industry consolidation. She specifically singled out collector incentives as an area of focus for collection techniques.

Twohig had positive things to say about the ACA’s effort to improve the consumer complaint situation, specifically referencing the association’s newly-passed Code of Ethics[http://www.insidearm.com/go/arm-news/aca-adopts-new-code-of-ethics-for-collection-industry]. “[The ACA’s] focus on creating a point-person for complaints is very helpful, and a step in the right direction,” she said.

In a much-circulated point, the FTC received more than 69,000 consumer complaints against collectors in 2006.

Andrew Beato, an attorney with the DC firm Stein, Mitchell, and Mezines and Regulatory Counsel for the ACA, noted in the presentation, “This many disaffected consumers is unacceptable and must change. The ACA is fully committed to working with the FTC on this matter.”

Twohig said that the new Code of Ethics from the ACA is a “good step forward,” but that to be effective, “the code must be meaningful and well-enforced.”