New York, N.Y. – Invalid and illegal debt collection practices are at an all-time high across the United States. RewardExpert – a free service that helps users take full advantage of credit card and travel rewards – today released a study analyzing The Worst States and Companies for Invalid Debt Collection Activities. RewardExpert analyzed data from the Consumer Finance Protection Bureau (CFPB) to identify the states in which this epidemic is most prevalent, and which companies are engaging in questionable collections practices.
“You’d expect zombies at your Halloween party, but not when it comes to your finances; “zombie debt” collections are attempts to collect debts not owed, debts that were already paid or discharged, debts owed by someone else, or a result of identity theft,” says RewardExpert CEO and co-founder Roman Shteyn. “Third-party debt collectors, who purchase and profit on collecting debts that have been written off as a loss by the original creditor, are most likely to practice zombie debt collection. RewardExpert set out to determine the states where zombie debt collection runs most rampant and which debt collection agencies are responsible, both nationally and on a state-by-state level.”
The five states in which zombie debt collection is most prevalent are:
- Delaware – Delaware leads the nation when it comes to the likelihood of having to deal with a collection agency trying to collect a debt you don’t owe. With a total of 422 complaints in the Consumer Complaint Database, Delaware has a per-capita rate of 44.72 complaints per 100,000 residents.
- Florida – Hard-hit by the mortgage crisis and the collapse of the housing bubble, Florida comes in at number two with 42.43 complaints per 100,000 residents (a total of 8,314 complaints in all).
- Georgia – Third-place Georgia trails Florida by two hundredths in its per capita incidence rate of reports of zombie debt collection attempts, with 4,258 complaints registered and a population of almost exactly 10 million residents.
- Nevada – Like Florida, all areas of Nevada (with the exception of Carson City) have incidence rates of illegal debt collection attempts well above the national average of 25.84 per 100,000.
- Maryland – Maryland closely trails Nevada, with 38.65 complaints per 100,000 residents. The affluent and suburban Prince George’s County has an incidence rate of 66.6 per 100,000 residents, while neighboring Montgomery County’s incidence rate is a much lower 39.1 per 100,000.
The three debt collection agencies most likely to engage in invalid debt collection practices in the country are:
- Encore Capital Group
- Enhanced Recovery Company (ERC)
- Portfolio Recovery Associates
“Knowing which debt collection agency has a history of practicing zombie debt collection in your state can help you avoid paying money you never owed,” says Shteyn. “If you do find yourself facing a debt collector, take steps to protect yourself, such as sending a written dispute to the agency demanding verification of the debt, checking for discrepancies, and showing up or responding to any court summonses, so that the collector doesn’t win your case by default.”
To determine the ranking, RewardExpert analyzed data extracted from the Consumer Finance Protection Bureau Consumer Complaint Database, which consists of 82,285 complaints regarding illegal collection practices filed with the CFPB since 2011. The data was then broken down into geographical locations and evaluated on a per capita basis.
For further information and to view the full report, visit the RewardExpert website.
RewardExpert helps users navigate the world of frequent flyer programs and credit card rewards. The free web service provides smart tools and features that enable users to make more rewarding decisions. Through personal finance and travel insights, users are empowered to turn their spending into earning. Find out how to quickly gain rewards while spending less to see more of the world. To get started, visit www.rewardexpert.com.