Debt collectors are known for hassling consumers, and in their desperation to collect money, some are even resorting to questionable tactics. According to the Federal Trade Commission (FTC), complaints about debt collectors rose by 17% in 2010. This number has tripled since 2002, and accounts for 27% of all FTC complaints.

It’s not just a federal problem, either. The South Carolina Dept. of Consumer Affairs says that debt collection tactics were the top consumer complaint category within the state. Debt collection complaints in South Carolina are in line with the country as a whole as being the number one complaint of consumers.

But debt collectors might finally be put in their place when the Consumer Financial Protection Bureau (CFPB) rolls into action on July 21. The new Bureau has the power to aggressively investigate complaints, as well as write new rules.

The Number One Complaint
According to the FTC, the agency received more complaints about debt collection than any other industry in 2010. The number increased by 17% from 2009 to 140,036 consumer complaints. In South Carolina alone last year, there were 5,500 complaints from consumers. This accounted for 13% of all complaints in the state. The agency in the state worked with consumers to resolve complaints, which resulted in $580,000 being returned to consumers in 2010.

The FTC found that about half of the complaints nationwide involved consumers reporting badgering on the part of collectors with repeated calling. For instance, a 69-year-old woman in Atlanta, GA, reported receiving approximately 20 calls a day from a collection agency. She has taken the collection agency to federal district court, where she could collect at least $1,000 in damages. The FTC also found that in 27,554 complaints nationwide that collectors were threatening consumers with the possibility of criminal prosecution and seizure of property if they didn’t pay the amount the collector was seeking. Consumers also reported 4,182 cases of debt collectors threatening violence.

The FTC recently took action against West Asset Management, a debt collection firm that engaged in all of these tactics, and in some instances even tapped into debtors’ bank accounts and credit cards without their permission. The firm reached a $2.8 million settlement with the agency in March.

The Future
Although the FTC has the authority to investigate complaints, it cannot write new rules. As such, new forms of technology, such as cell phones, email and voicemail are all still fair territory for collectors. This is the perfect scenario for the up-and-coming CFPB, which will have the authority to investigate these types of complaints, as well as write new rules. The Bureau will have the authority to impose new rules on debt collection agencies, such as requiring them to provide more information to consumers regarding the basics of each debt.

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