Video: Feds eye debt collectors

By Kerry Sanders Correspondent
NBC News
updated 8/24/2006 10:42:59 PM ET 2006-08-25T02:42:59

Felipe Reyna says all he did was answer his cell phone. After that, he was bombarded with calls demanding he pay a $1,300 debt. The only problem?

“It was somebody else's debt,” says Reyna.

Despite the collectors' mistake, the calls became more aggressive and threatening, like this recording with other victims.

“You don't want to pay your bill?” says a voice. “Fine, don't pay your bill. My company will get your money one way or another.”

The Federal Trade Commission reports that almost 20 percent of its consumer complaints are about aggressive, obnoxious, third-party debt collectors.

“Who are you?” says a voice on another phone call.

“I am the guy that's going to end your life, that's who I am,” is the reply.

Federal law prohibits abusive calls like that, but consumer rights advocates say those heavy handed Mafia-like tactics remain in part because they work.

“I recently recovered $275,000 for a client on an abusive collection call case and I'm not sure it had any effect on the conduct of the industry,” says consumer rights attorney Peter Barry.

ACA International, the collection industry's trade association, says the problems are small for an industry that collected $39 billion last year.

“Debt collectors receive thank you notes every single day,” says ACA spokeswoman Rozanne Andersen. “And the reason they do is because the consumer is so appreciative for the fact that the debt collector assisted them with their payment problems.”

Reyna says the debt collector threatened to call his neighbors and tell them he was a deadbeat. But he was never called by his title, “Your Honor.” Reyna’s a judge on the Texas Court of Appeals.

“If these folks can do it to an appellate court judge, what do they do to the plain old blue-collar worker out there that perhaps only has a high school diploma?” he asks.

The answer is on hours of recorded calls now being investigated by federal authorities.

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