Gripes of Wrath: Debt Collection 2nd Highest Consumer Complaint Industry

Mar 04, 2015

Debt collectors are never popular with those they collect from, but for the Federal Trade Commission received the 2nd highest number of consumer complaints about the debt collection industry. According to the FTC’s 2014 Consumer Sentinel Network Data Book, debt collection trailed only identity theft, which has a streak of fifteen consecutive years as the most-complained about transgression, and came in ahead of imposter scams.

The debt collection is an important cog for many major companies when it comes to micro-collection of owed sums. Each small debt adds to a collective amount that is far too large to ignore but every telecommunications giant doesn’t have time to track down each delinquent bill. Yet, debt collectors often have a reputation as bullies who harass working class people to collect pennies on the dollar. This reputation comes from, of course, debt collectors that have bad business practices that DO bully and harass people.

Bad debt collectors get recycled and flushed out quickly as they often can’t hold onto the fundamentals of business to be successful. But, for the debt collector that doesn’t practice sketchy and illegal tactics, can actually maintain an open collection agency merchant account, and maintain a level of success, the report is mildly irritating.

The report is a consequence of the get-rick-quick dupes, who think debt collection is an easy route to success, combined with the fact that no consumer ever likes the person collecting their debt. High numbers of complaints are inevitable as debt collectors exist to complain to consumers about not paying what they owe. For these two reasons, debt collection finds itself in the company of actual illegal scams such as identity theft and imposter scams.

Identity theft led the way with 13% of the nation’s total complaints while debt collection and imposter scams both posted 11%. Debt collection edged imposter scams by approximately 4,000 complaints. The rest of the top 5, perhaps unsurprisingly, was rounded out by telephone and mobile services and banks and lenders.

While the report may come as no surprise to the honest merchants in the debt collection industry, it represents the struggle any merchant getting into the business can face. It’s not a popular business, consumers will not like you, and it’s easy to get into the trouble with the FTC. In short, the definition of high risk.

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