The Federal Trade Commission’s recent $3.2 million settlement with Expert Global Solutions, the world’s largest debt collector, shows the body’s resolve to pursue harsh penalties under current debt collection laws as it pushes for updated legislation.

Expert Global Solutions, accused of harassing consumers, agreed to follow the Fair Debt Collection Practices Act (FDCPA) rules restricting contact with debtors. Regulators, however, argue that the FDCPA needs to be updated to address the changes in communication technology that have evolved since the bill was approved in 1977. They also point out that the bill should be updated to address issues that come along with the sale of debt, a practice that has grown in the last few years.

Until new legislation is passed, the FTC and other regulatory agencies will continue to issue tough penalties to FDCPA violators.

The penalties “send a very clear message that the FTC, just like the CFPB has a laser-like focus on the debt collection industry, which is both debt collectors and debt buyers,” said Alan Kaplinsky, a Ballard Spahr partner who heads up the firm’s consumer financial services group. “We’re going to see a lot more activity in this area with these two agencies working along with state agencies. This is just the tip of the iceberg.”

Related Practice

Consumer Financial Services