We’re fed up!

SACRAMENTO, Calif. ­— Kristy Schwarm was introduced to collection agencies after she bounced an $83.41 check at a Mendocino County FoodMaxx. She soon started receiving menacing letters on district attorney and sheriff’s department letterhead, warning her she was under criminal investigation and threatening her with arrest.

In rural Fresno County, an 18-year-old student living with her parents became anxious and depressed and eventually dropped out of school after a Hanford-based collector kept calling at home and at work about a delinquent $3,509.18 hospital bill.

“Her voice is stuck in my head, and it’s ugly, ugly,” said Margarita Guzman of Parlier, a town of about 13,000 southeast of Fresno. “She made me feel like I was this bad person and couldn’t be responsible.

“Then people started asking me, ‘Why are you putting up with this?’” said Guzman, now 23.

Harassing phone calls, threats of arrest, vulgar language, calls to employers, lawsuits against people who don’t even owe money — all are hallmarks of the Wild West tactics consumers are confronting amid the troubled economy.

But there is a twist. A surging number of Californians _ including Guzman and Schwarm _ are turning the tables on collection agencies as the state experiences an explosion in lawsuits filed against debt collectors.

In the last seven years, the number of lawsuits in California accusing collectors of violating federal law has increased fivefold, The Sacramento Bee found in an analysis of more than 5,000 debt-collection cases filed in California’s federal courts since 2005.

Since Kristy Schwarm set off a successful class-action suit in 2005, the number of federal lawsuits in California alleging violations of the Fair Debt Collection Practices Act jumped from 230 to 1,255 last year.

Complaints to California’s attorney general about debt collection practices also climbed steadily in the past six years, hitting its highest peak last year.

“The economy is so bad that it’s getting more and more difficult for these debt collectors to get money from people who just don’t have it,” said Tammy Hussin, a Carlsbad attorney who handles debt collection cases for consumers.

“So the collectors are more frustrated, and they’re getting more aggressive.”

Hussin cites instances where “rogue collectors” have stalked their targets, harassed them at work and even threatened violence. “There are some really nasty things going on,” she said.

Abusive and profane telephone language has fueled many of California’s lawsuits. Debt collectors are accused in court papers of calling consumers a “jackass,” a “(expletive) idiot,” a “big baby,” a “low-life,” a “crackhead,” an “irresponsible flake” and “stupid.”

An Iowa woman complained that a Southern California collector threatened to fart in her face over a debt she insisted she did not owe.

Debt collectors paint a different picture, saying a few bad actors in their ranks have tarnished an industry vital to the country’s economic health.

As for the litigation rush, some collectors portray themselves as victims.

They contend the spiraling lawsuits do not necessarily reflect poor business practices but rather the ingenuity of a small band of lawyers, who have crafted a cottage industry to cash in on these claims.

Jack Gordon, a former debt collector in Michigan, said he was so concerned about the escalation of “frivolous” lawsuits nationally that he established a company in 2009 to monitor legal trends and advise the industry.

“The plaintiff’s bar has found their ideal statute, really,” said Gordon, the CEO of WebRecon. “It’s almost guaranteed that they can’t lose.”

Gordon found that more federal lawsuits were filed against debt collectors in California last year than any other state. His data reveal that eight of the nation’s 30 busiest attorneys pursuing debt collectors are licensed in California, representing more than 1,000 consumers last year.

“And there’s no indication that this is going to stop,” Gordon said.

So far, the federal government and attorneys general in several states, including California, have shown little sympathy for the debt collection industry.

The Federal Trade Com-mission, which oversees the industry, declared in a 2010 report that the nation’s debt collection system is “broken.” In its report, the FTC urged states to do more to protect consumers and improve debt collection practices.

In January, the California Senate passed a bill that would create new consumer protections against unfair debt collection practices. The bill, by San Francisco Democrat Sen. Mark Leno, is now in the Assembly.

Amid a faltering economy, the debt collection business is flourishing — with employment expected to grow faster through 2018 than the average for all occupations, according to the U.S. Bureau of Labor Statistics.

Why? Consider the pool of “clientele.”

Today, some 30 million people in the United States are being pursued by collectors, with an average unpaid debt of $1,400, according to figures from the newly created U.S. Consumer Financial Protection Bureau.

An important distinction is just who is in pursuit.

The market of third-party debt collectors is dominated by three types of operators: Agencies that collect debt for another company in exchange for a fee. Firms that buy debt from the original business, often for pennies on the dollar, then keep for themselves whatever they collect. And, law firms that collect through filing lawsuits.

Whatever the business model, third-party collectors historically have fallen under the watch of the FTC, which enforces the Fair Debt Collection Practices Act (FDCPA). Some of that responsibility is shifting to the Consumer Financial Protection Bureau.

The FTC publicly acknowledges that “debt collection plays a vitally important role in the consumer credit system.” Even so, there are limits to what debt collectors can do, and the government is charged with protecting consumers from deceptive, unfair and abusive tactics.

California has its own statute forbidding such practices, though the Golden State quit regulating debt collection agencies in 1992.

Collectors have long argued that federal law and many state statutes are vague — leaving open to interpretation, for instance, how many collection calls in a specified period constitutes harassment.

“There is a lack of clarity,” said Mark Schiffman, spokesman for the Association of Credit and Collection Professionals, known as ACA International, a Minneapolis-based trade group that represents 5,000 agencies.

“There is a reason why debt collectors aren’t leaving voicemails any longer, and that’s because it’s unclear what the collector can or can’t say.”

Meanwhile, consumers are filing complaints in record numbers. The FTC gets more complaints about the debt-collection industry than any other single business, the federal agency reported last year.

While consumers are leading the litigation charge, the FTC recently began its own aggressive legal pursuit of one Southern California debt collection firm that billed itself on letterhead as “Aggressive, Dignified, Effective.”

The government disagreed with that assessment, calling the agency a “shake-down debt collector.” Last fall, the FTC persuaded a federal judge in Los Angeles to halt the operation and freeze the assets of Van Nuys-based Rumson, Bolling & Associates. The company operated under a series of names, including Forensic Case Management Services Inc. and Commercial Investigations.

The lawsuit is part of what the FTC describes as an ongoing “crackdown” on illegal debt collection practices. This one, the government contends, raked in more than $20 million in the last four years by deceiving small businesses and abusing their alleged debtors.

The FTC, aided by several Southern California Better Business Bureaus, interviewed numerous consumers nationwide about their distressing brush-ups against the California company, according to court documents.

Among them: A mother in Missouri who owed $5,000 for her daughter’s funeral was informed that her daughter’s body would be dug up and hung from a tree if she didn’t pay up. She also claimed the collector threatened to shoot her dog and eat it.

In Southern California, a single mother with special-needs children complained that the bill collector told her she should “sell” her “retarded children.”

An email to one debtor read: “Jesus paid his bills. Why don’t you? We have had this account for 4 months now. Not even $1. That is not what Jesus wants. That is why the Muslims are winning.”

“We’ve seen some very nasty practices, but the stuff we’re seeing in the Rumson case is particularly terrible,” said Chris Koegel, the FTC’s lead attorney in the case.

Defending itself against the FTC’s action, the company’s attorneys denied the defendants engaged in unfair, deceptive or abusive acts. In protesting the shutdown and freezing of assets, the defendants’ attorneys acknowledged “some employees used ‘creative’ — and more accurately regrettable — devices in collecting debts.”

“But the fact that there may have been some bad apples in the barrel does not mean that the barrel should be destroyed … “

For most consumers, the FTC is unlikely to ride to the rescue over alleged debt collection abuses.

Enter private attorneys.

The Bee’s examination of debt collection cases in California revealed a small group of lawyers and firms are dominating the federal filings.

The money at stake per lawsuit is generally around $5,000 — unless you are the collection agency ordered to pay a Texas man $1.5 million in 2010 for leaving racist and vulgar phone messages. In addition to the massive punitive damages, a Dallas jury awarded the man $143,000 in attorney’s fees and $50,000 in mental anguish —all because of a disputed $81 credit card debt.