Some Debt Collectors Are Using Illegal Tactics

ByABC News via logo
February 8, 2006, 7:30 AM

Feb. 8, 2006 — -- The Federal Trade Commission gets more consumer complaints about debt collectors than about any other industry. Americans report being harassed, threatened, even coerced into paying debts that aren't their own.

Hundreds of collection companies now specialize in collecting on 10- to 20-year-old debts called "zombie debts" -- debts so old you can't even be sued over them.

Every day, millions of Americans receive intimidating phone calls, like the ones that Frank Buselli started getting.

"I perceived the last phone call as a threat," Buselli said. "When they said they were going to send some thugs up there to get me, they had crossed a serious line with me."

Buselli doesn't even owe anyone any money! It turns out the callers were trying to collect on his 36-year-old daughter who hadn't lived at home in years and said she didn't have any debt either.

Buselli called the police and the FTC. His tip helped the FTC crack down on an aggressive collection company called Camco.

"Essentially what they did was they went into the phone book," said the FTC's Joel Winston, "looked up people with the same name in the same area [as debtors] and started calling them, abusing them and threatening them to pay debts that we think in 80 percent of cases the consumer didn't owe the debt."

The FTC got an injunction against Camco, and the company abandoned its Illinois offices so fast that the offices appeared to be frozen in time -- complete with cigars, calendars listing collection goals, and a board where workers added up all the money.

One woman, whom we'll call Jamie, used to work for Camco. She did not want to be identified because she still runs into her co-workers. She said she heard "collectors threatening anything and everything they could in order to get the money."

"There were collectors who would tell people: 'I know your address. I know where you live. I know where you work. I'll find out where your children live. I will do whatever I have to do to get this money,' " she said.