State Launching Major Crackdown on Debt Collectors

Officials in Florida announced Tuesday that they are launching aggressive enforcement programs targeting illegal debt collection practices and recommending changes to state law that focus on accounts receivable management firms.

Florida Attorney General Bill McCollum and state Chief Financial Officer Alex Sink separately announced that their offices are proposing aggressive changes to state law to combat “abusive debt collectors.”

McCollum said that he wrote leaders in Florida’s legislature proposing legislative language would make certain debt collector practices a "per se" violation of the Florida Deceptive and Unfair Trade Practices Act, providing a clear basis for pursuing civil litigation.

“As Attorney General, I am willing to go above and beyond what the law currently requires so that people who have complained about abusive practices by debt collectors may finally get some relief,” said McCollum in a statement.

Sink offered a bulleted list of proposals for legislators centered on the handling of consumer complaints against debt collection agencies:

• Reducing the number of complaints needed to refer an abusive collector to the State Attorney or Attorney General, and eliminating a time period required, as opposed to the current requirement of five complaints in one year.
• Implementing stronger penalties against abusive or non-responsive debt collectors, such as imposing higher fines and cease and desist orders.
• Changing the complaint form to make it easier for a consumer to file a complaint.
• Updating the way resolved complaints are tracked by the Office of Financial Regulation to better understand repeat offenders and trends.

“There are clear, commonsense changes that are needed to better protect Florida’s consumers against these abusive debt collector practices,” said Sink.  “I will continue to work in a collaborative way in order to put real teeth in the law and crack down on abusive debt collectors.”

Sink noted that her proposals stemmed from a meeting held last week between Office of Financial Regulation (OFR) Commissioner Tom Cardwell and the Chiefs of Staff from the CFO’s and Attorney General’s offices.

McCollum and Sink have been embroiled in a public battle over debt collection complaints for weeks. The Orlando Sentinel sparked the skirmish after a series of reports detailed the abusive practices of some debt collectors and the state’s failure to accurately track complaints against collectors and stop the practices.

McCollum and Sink are considered to be the front-runners in the Florida Governor’s race, the election for which is scheduled for November 2010.