Senator seeks probe of posthumous debt collection

March 11, 2009 7:07:21 AM PDT
A senior senator is asking the Federal Trade Commission to investigate reported instances of debt collection firms asking people to pay their dead relatives' credit card bills or other debts. Sen. Charles Schumer, D-N.Y., a member of the Senate Banking Committee, met Tuesday with the new chairman of the FTC, Jon Leibowitz, and requested that the agency look into a practice he said appears to violate the law.

"These companies call surviving relatives, often shortly after the death of a loved one, to coax or cajole them into making payments on the deceased relative's credit card," Schumer said in a letter sent to Leibowitz on Wednesday. "To say the least, this practice is distasteful and unethical. Moreover, this practice may very well violate the Fair Debt Collection Practices Act."

Schumer asked for an accounting of how many debt collection firms engage in the practice and which companies that issue credit cards retain debt collectors for that purpose. If the practice isn't declared illegal, the FTC could at least require debt collection firms to notify the relatives they contact that they have no legal obligation to pay the debts, Schumer suggested.

Debt collection firms "conveniently omit" telling relatives of deceased debtors that they aren't legally obligated to pay, Schumer said.

Amid tough economic times, his office has received complaints from New York state residents about the practice. A recent article in The New York Times said the business of collecting dead people's debts is expanding, helped by improvements in database technology that provide easy access to probate court records.

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