Paper Launches Investigative Series on Debt Collection

A newspaper in Ohio on Sunday and Monday published the first two pieces in an investigative series on consumer credit reporting. But so far, the series – called “Credit Scars” – has been focused more on the debt collection industry.

The Columbus Dispatch, the largest newspaper in Ohio’s capital, launched their series Sunday with an article titled “Debt deception.” The piece focused mainly on debt collectors and their use of consumer credit reporting to compel payment.

The article does make a distinction between legitimate debt collection efforts and those taken by bad actors in the ARM space. The piece begins:

Rogue debt collectors are chasing Americans for debts they paid long ago or never owed, and they are threatening consumers with ruined credit reputations if they don’t pay.

But the Dispatch also uses consumer complaint volumes against debt collection agencies to paint a picture of widespread abuse in the ARM industry when it comes to credit reporting.

The “Credit Scars” series is actually a retread of a four-part series that ran in May 2012. The original articles were almost exclusively focused on credit reporting issues and looked to the impact the Consumer Financial Protection Bureau (CFPB) would have in their regulation of the Fair Credit Reporting Act (FCRA).

The second article, published Monday, looks at the legal debt collection channel. Titled, “Law, courts involved in prolonging agony of debt,” the story covers the oft-traveled grounds of default debt collection judgments and the impact those orders have on consumers over a long period of time.

The article notes that many ARM industry associations, like ACA International and DBA International, are calling for clarification of federal and state laws that create a difficult environment for both legitimate collectors and consumers.

“We need to balance around consumer protection and collectors who need to do their job,” ACA spokesman Mark Schiffman told the paper. “But we’re governed by this patchwork quilt.”

Formal recommendations made by the FTC after their investigation of the legal collection industry were noted as a possible first step in dealing with debt judgments and credit reporting.