Editorial: Paying the piper

Thursday, July 6, 2006 | 7:26 a.m.

Americans' personal debt continues to rise and so has the number of complaints lodged with the Federal Trade Commission about unethical bill collectors.

According to The New York Times, the FTC received 66,627 complaints against third-party debt collection agencies last year, an amount six times as many received in 1999. The FTC is charged with enforcing the Fair Debt Collection Practices Act, a 1977 law that prohibits bill collectors from using deceptive, abusive or unfair tactics.

Experts say the increase in complaints coincides with rising interest rates, tighter bankruptcy laws and record consumer debt. Americans owe, on average, $11,669 in personal debt. Nevadans carry $13,122, on average.

To offset collection costs, creditors sell overdue accounts to collection agencies, some of which, the FTC reports, misrepresent the amount of money people owe, make frequent harassing and abusive phone calls at odd hours or contact relatives, employers and even future employers of those who owe money. What's worse is that some of these debts have already been paid or were the result of mistaken identities, the Times reports.

Americans are living on the edge financially. Personal savings are at an all-time low and late payments are increasing. Companies are entitled to recover the money owed to them, but that doesn't give them the right to abuse people.