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FTC tightens debt collections post-mortem

Nov. 22, 2010 at 2:59 PM   |   Comments

WASHINGTON, Nov. 22 (UPI) -- Consumer advocates say the U.S. Federal Trade Commission has asked for trouble by revising rules for collectors chasing debt from people who have died.

The new rules allow for a wider circle of people to be contacted, beyond family members and the legal executor of the estate. There is also the term "spouse" that some advocates say is inaccurate as a marriage ends when one of the partners dies. The Washington Post reported Monday.

Some advocates warn that some debt collectors will press even friends to pay the debts of someone who has died, using a "moral obligation" argument, the Post said.

Robert Hobbs, an attorney with the National Consumer Law Center said the FTC should "strengthen protections for grieving families and friends, not open the door to debt-collection efforts."

"Presumably we're dealing with elderly people at the most vulnerable time that you could imagine," said attorney Richard Rubin, a consumer rights advocate in New Mexico.

"The debt doesn't disappear when the person dies. It's still a valid debt, and the collector can still collect it," said Joel Winston, FTC associate director of financial practices, the Post reported.

"We are determined to ensure that the collectors play by the rules," he said.

The FTC has extended the deadline to Dec. 1 for the public to comment on proposed rule changes.

© 2010 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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