GAO Report Recommends Updates to FDCPA

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A recent report from the U.S. Government Accountability Office (GAO) urged Congress to update the nation's ruling collection law to account for changes in both the industry and the technology available to third-party debt collectors.

Of greatest concern to the GAO were the problems caused by the dearth of information collectors often have about their targeted accounts. "State and federal enforcement actions, anecdotal evidence, and the volume of consumer complaints to federal agencies-about such things as excessive telephone calls or the addition of unauthorized fees-suggest that problems exist with some processes and practices involved in the collection of credit card debt, although the prevalence of such problems is not known," said the report. "One issue is that collection agencies and debt buyers often may not have adequate information about their accounts-sometimes leading the collector to try to collect from the wrong consumer or for the wrong amount-or may not have access to billing statements or other documentation needed to verify the debt." The report goes on to note that as the prevalence of debt-buying increases, accounts for collection can often be sold and resold, making verification even more difficult as the debt moves further and further away from the original parties.

The FDCPA, enacted in 1977, also lacks provisions that pertain to several technologies now ubiquitous in America's business world. E-mail, voice mail and mobile telephones were all non-existent at the time, and some of the Act's precepts reflect this: the GAO report notes that, in some instances, a debt collector may technically be in violation of the FDCPA if someone other than the debtor overhears a voice mail message revealing the debt collection effort. Other technologies that may have FDCPA ramifications for collectors are caller ID machines and predictive dialers, which can violate the Act's provisions prohibiting harassment by an overabundance of calls.

The GAO's recommendation was for congress to update the legislation to account for both the absence of information and the new technologies now relied on by debt collectors. Additionally, and perhaps more practically, the GAO suggested giving the Federal Trade Commission (FTC) rulemaking powers. When the legislation was first passed, it withheld this authority from the agency, which has limited its ability to address concerns such as the ones listed in the GAO report.

A full copy can be found by clicking here.

Jacob Barron, NACM staff writer. Follow us on Twitter at


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