FTC Ammends Debt Collection Rules For The Deceased

The Federal Trade Commission announced Monday it is proposing a new rule for the debt collection industry.

The proposal provides guidance for debt collectors on how they can identify the proprietor of the deceased's estate. Officials hope the new rule will ensure collectors don't make misleading claims regarding the responsibility of the unpaid bills.

However, some argue the regulations leave the door open to legal proceedings against those looking to rightfully collect debts, Don Jones reports.

"The plain language of the Fair Debt Collection Practices Act does not allow collectors to contact friends, neighbors or relatives except to obtain contact information for debtors," said Robert Hobbs, of the National Consumer Law Center. "This proposed rule could open the door for collectors to seek money by prodding and misleading grieving relatives and friends into thinking they have obligations that they don't."

Agency officials received more than 119,300 complaints last year regarding third-party debt collectors, the news source says. Proponents of the bill say it will likely clear up ambiguity in the system and lead to less disputes.

Currently, the FTC is allowing public comments on the proposal until December 1.