Debt Collection Complaints Surge In Carolinas

HUNTERSVILLE, N.C. — People trying to climb out of debt are filing a growing number of complaints against collection agencies, accusing them of abusive and threatening behavior, among other things.

Federal Trade Commission data analyzed by WCNC Charlotte shows the number of complaints filed by consumers in the Carolinas and nationwide has spiked over the last year. Overall, thousands from the Carolinas have filed complaints with the FTC about debt not owed or abusive and threatening debt collection practices.

In North Carolina alone, FTC data show the number of complaints has increased by more than 10 times since the beginning of 2024.

Rashida Mungin of Huntersville knows what it’s like to be on the other side of one of those calls.

“They were being very abusive,” she said of her experience talking to debt collectors in recent years. “They were kind of like, ‘How can you not be paying your bills? What kind of person doesn’t pay your bills?’ It was demeaning.”

Raised in a family that valued financial responsibility, Mungin fully accepts blame for her spending habits as an adult. She swiped multiple credit cards freely when she moved to New York City for nursing school, eventually racking up more than $30,000 worth of debt. She said as her expenses spiraled out of control, harassing debt collectors started calling and didn’t stop.

“They’re strident and to the point. They want their money,” Mungin recalled. “It was just kind of heart-wrenching a little bit, because I knew I can’t pay and they’re gonna kind of demean me.”

Mungin, a nurse practitioner, has since greatly reduced her debt, but continues working through the trauma.

“I kind of felt like a fraud,” she said. “I’m in a profession that gives advice and helps people heal and feel better, but my financial life was kind of on life support.”

At the time of the calls, Mungin didn’t realize she had options. The non-profit Money Management International helped her secure lower interest rates and come up with a plan to pay back the money owed.

“There are legitimate third-party collections agencies, but the ones that are using those tactics, it’s really antiquated and it really doesn’t make consumers want to pay,” MMI senior credit counselor Jonathan Wolfsohn said. “It really just scares them not to want to engage. So yes, it’s upsetting. Consumers deserve better.”

Wolfsohn, who once worked as a debt collector, told WCNC Charlotte that if a caller treats you unfairly, is abusive or deceptive, the government can help. He said your state attorney general’s office, the Consumer Financial Protection Bureau and FTC all provide crucial oversight of this industry.

“There’s a way that you can do it and there’s a way to make people miserable and continue to harass them and call them,” he said. “If they’re applying pressure to you, those are their pressure points.”

Beyond reporting questionable and potentially illegal behavior to the proper agencies, Wolfsohn said people have rights. For one, you can ask debt collectors to stop calling. You should do so in writing in a request through the mail with a return receipt to show proof of delivery, he said.

He also suggests people don’t pay any debt until they request and receive written proof that the debt is valid. Wolfsohn said debt collectors are required to provide that information within five days of first contacting someone.

“They’re not taking into consideration your situation holistically, they’re just concerned with, ‘This is my debt,'” he said. “The way they typically get compensated is they get a portion of what they collect, so they’re going to try to get as much as they can up front.”

In order to protect yourself, Wolfsohn added consumers should listen for a mini-Miranda statement from the caller, which shows they are a legitimate debt collector. After spending several years as a debt collector himself, Wolfsohn has spent the last quarter-century helping people overcome their debt.

“I really didn’t feel good about what I was doing,” he said of why he made the change. “I have the capacity to be able to every day go in and help people, legitimately help people that are in desperate, desperate need.”

With MMI’s help, Mungin has substantially paid down her debt. She doesn’t receive any more calls and isn’t bound by financial stress.

“I’ve really learned, which feels great,” she told WCNC Charlotte. “I’m on track to get debt-free in three years. It feels really good.”

ACA International, the trade group representing debt collectors, believes the increase in complaints is the result of growing consumer awareness and not more aggressive tactics or a rise in Fair Debt Collection Practices Act violations. ACA International CEO Scott Percell said some of the complaints are likely duplicates or not really complaints at all, but rather questions from consumers.

“ACA International members take all questions, inquiries, or complaints seriously,” Percell said. “Two-way communication between a consumer and the collection agent is the best way to learn about options to successfully resolve a debt…AI-generated, duplicative complaints, and those submitted through online templates, may contribute to a rise in complaints tracked by the CFPB and FTC. These are often not actual complaints and unfortunately many consumers are misled by ‘finfluencers’ into believing that it is more beneficial to first contact a federal agency, rather than have a conversation that could more quickly and efficiently resolve any issues. Worse, often the consumer has no issue at all, and is misled by a ‘finfluencer’ into providing false or embellished information to a federal agency.”

Percell added creditors and collection agencies continue to monitor and respond to complaints.

“Based on a comparison of the increase of debt collection complaints to the CFPB and other regulators versus the number of FDCPA suits filed against collectors, the data suggests that debt collectors are not being more aggressive or violating the FDCPA at a higher rate but rather points to an increase of consumer awareness and how to use the portal,” he said.

Contact Nate Morabito at nmorabito@wcnc.com and follow him on Facebook, X and Instagram.