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Washington, D.C.—In both total number of complaints and as a percentage of all consumer complaints, the debt collection industry once again finds itself squarely at the top of the charts in the Federal Trade Commission (FTC) annual report to Congress as the most complained-about industry in America.

The report comes just weeks after the Internal Revenue Service (IRS) renewed the contracts of two private companies to collect taxes despite the failure of the IRS private tax collection program—and in the face of consistent strong opposition to it from both within and outside the IRS, led by the National Treasury Employees Union (NTEU).

The program incurred a $50 million net loss in its first year of operation, and is not expected to reach the break-even point until fiscal year 2010 at the earliest.

The FTC report tracks consumer complaints to the FTC about actions under the Fair Debt Collection Practices Act (FDCPA), enacted 30 years ago and designed to prohibit deceptive, unfair and abusive practices by third-party debt collectors. Such companies lead the FTC list year after year.

“This report shows a disappointing but unsurprising continuing increase in consumer complaints about private debt collectors,” said NTEU President Colleen M. Kelley.

For all of 2007, the FTC told Congress it received 70,951 FDCPA complaints about third-party debt collectors—20.8 percent of all complaints sent directly by consumers to the commission. Both figures are up from a year earlier; in 2006, debt collectors accounted for 69,249 FDCPA complaints. That was 19.9 percent of the total for the year.

The likelihood of abusive treatment of taxpayers—examples of which were presented at a House Ways and Means Committee hearing last fall on the IRS program—was just one of the serious problems President Kelley repeatedly warned about in using private companies to collect taxes.

Another—and one which also has been proven accurate—was the waste of taxpayer dollars. In addition to its net loss of $50 million in its first year, the IRS’s own National Taxpayer Advocate warned in congressional testimony earlier this month the program could cost the government more than $81 million in foregone revenue this year alone. That figure, she warned, could rise to as much as half-a-billion dollars in such losses over the next six years. The private companies are paid up to 24 percent of the money they collect.

The IRS has repeatedly testified its own employees can perform the work on a substantially more cost-effective basis than can private companies.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.