Don’t be a victim of predatory debt collectors

In today’s economy, the American consumer is caught between a rock and a hard place. On one side, credit card balances have climbed to a staggering record of $1.23 trillion, a 60% increase from the pandemic-era lows of 2021. On the other side, the federal agencies tasked with protecting consumers, the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC), are navigating a period of unprecedented cutbacks and structural decline.

The convergence of record-high debt and a stripped-to-the-bone regulatory environment has created a fertile breeding ground for predatory debt collection. Without the watchful eye of a robust federal presence, the boundary between legitimate collections and harassment is rapidly dissolving. Recent reports indicate the CFPB has faced staff cuts of up to 80% in some departments.

Low income consumers are favorite targets of predatory debt collectors

While it may seem counterintuitive for a company to spend money chasing a relatively small sum, lower-income debtors with balances under $1,000 are often the “sweet spot” for predatory debt collection.

This isn’t an accident; it is a calculated business model that relies on high volume, low resistance, and the ability to turn a $500 debt into a multi-thousand-dollar asset. Low income consumers often ignore debt collection mailings, emails, and phone calls. When they do pay attention, hiring an attorney to fight a $800 lawsuit usually costs more than the debt itself.

Predatory collectors know that lower-income individuals often cannot afford legal counsel and may not even be able to take a day off work to appear in court. When a debtor ignores or fails to contest a debt collection action in court, a default judgment is the likely outcome and the collector moves to add on legal fees and court costs.  

Bad actors with little to fear from federal oversight file lawsuits in state courts, betting consumers won’t show up to defend themselves, often attempting to collect debts that are past the statute of limitations or have been settled. They engage in harassment tactics, contacting employers and family members or use social media to shame debtors, practices strictly prohibited by the Fair Debt Collection Practices Act (FDCPA) but difficult to police without oversight. Bad actors use “small print” clauses buried in credit card statements to keep consumers out of court and forced into arbitration.   

Don’t be a victim of predatory debt collection

At the Van Horn Law Group, we stop predatory debt collectors in their tracks. We know the law; we understand their tactics; and we have your back. Whether we negotiate with your creditors to settle your debt; file for bankruptcy on your behalf; or petition the court to dismiss actions against you; when we take your case, we become the point of contact for your creditors and we fight for you. Your fresh start begins when you call the Van Horn Law Group.

Marty Marks

Van Horn Law Group, Pittsburgh