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FTC makes recommendations regarding debt collection practices
By Marvin Milner on Jul 13th, 2010
One effect of not staying current on bills is that consumers may have to encounter debt collection companies.
Recently, the Federal Trade Commission said it has determined that the system used to resolve debt collection disputes is "broken," and is recommending it be reformed. Some of the recommendations include having states enact measures that would make consumers more likely to put up a defense against the claims of companies, thereby reducing default judgments.
Furthermore, the FTC said states should mandate that collectors present more information regarding particular debts when sending complaints to consumers.
The FTC study also looked at arbitration firms, which are often used to settle disputes between debtors and creditors. Past complaints about arbitration involved these firms having a problem being able to demonstrate impartiality. Consumers may have also been forced into accepting arbitration through an agreement, thereby giving up their day in court.
Naturally, the easiest way to avoid these problems is to stay out of money trouble in the first place. One option in doing so is debt consolidation, which could make it easier to pay off credit cards.
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