FTC Proposes New Guidelines for Collecting Debt from Dead People

The Federal Trade Commission is seeking to revise the protocol surrounding two of life's touchiest subjects: debt and death, the Washington Post reported today. The rise in debt collection has spawned a niche market devoted to recouping money from those who die with unpaid bills. The FTC began investigating the practice several months ago and found confusion among collectors over whom they were allowed to contact and what they could say, said Joel Winston, the agency's associate director of financial practices. The federal Fair Debt Collection Practices Act limits the people that collectors can contact to those with authority to pay the debt - typically a spouse or family member, and possibly a third-party executor of an estate. However, in a proposed policy statement, the FTC said that changes to court procedures have widened the pool of those who may be able to pay to include a host of other legal representatives. Some consumer activists have criticized the FTC proposal as giving too much leeway to debt collectors. In addition, they have questioned details such as use of the word "spouse" vs. "widow" or "widower," arguing that marriages end upon death. The FTC has extended the public comment period 0n the proposal to Dec. 1.

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/22/AR2010112200515.html
 
 
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