If you’re behind on your bills and on the receiving end of collection phone calls, you’ll probably hear collectors make some very threatening statements. While most debt collection professionals try to stay within the limits defined by the federal Fair Debt Collection Practices Act (FDCPA), many others regularly cross the line. Last year, the Federal Trade Commission (www.ftc.gov) received more than 58,000 complaints about debt collectors, representing 17% of all complaints received by the FTC. Consumers complain about the collections industry more than most other industries combined.
Collection professionals would likely respond that the sheer size of the industry and the sheer volume of collection activity explain the large number of complaints. However, consumers only report a small percentage of violations, so the data collected by the FTC represents only a small fraction of the true scope of the problem. Still, the FTC has well-documented a pattern of abusive and illegal billing activity, and it’s getting worse instead of better.
Here are some common threats made by debt collectors:
“We’re going to take your house unless you pay this bill right away.” This is a false threat. Unless the debt being collected is secured by the home in question (ie, a mortgage or home equity loan), the creditor does not have the power to take your home.
“If you don’t pay this bill today, we’re going to issue a warrant for your arrest.” Nonsense. Failure to pay a debt is a civil matter, not a criminal matter. Threatening a debtor with jail time or charging them with a crime is totally against the rules.
“We don’t care that you sent out a cease communication notice. We’ll call you anyway.” The FDCPA gives you the right to terminate contact efforts by a debt collector. Failure to comply with a cease communication notice is a clear violation of federal law.
“We are going to garnish his wages to recover this debt.” A collector can only threaten to take action for which they have the legal authority, and the vast majority of collection agencies do not have legal authority. Your wages can only be garnished by a creditor after he has won a judgment against you in a lawsuit.
“We know where you live, so you’d better pay up.” Yes, threats of violence still happen in this industry. Nearly 300 complaints against debt collectors received by the FTC last year cited the threat of violence as the cause of the complaint. This is absolutely illegal.
Aside from the usual false threats, collectors also use other tactics that are illegal. For example, discussing your debt with a third party is a clear violation of the FDCPA. However, collectors often call neighbors, family members, and employers to get information about debtors. As long as the debt collector does not discuss the actual issue of the debt, he still has his toes on the right side of the line. But as soon as they mention or even hint that they’re calling about a debt, they’ve crossed the line.
Since many debtors have taken to screening their phone calls at home to reduce the incessant barrage, debt collectors frequently call work when they can get an office number. In theory, a consumer can get the collector to stop calling the office simply by stating that he cannot receive personal phone calls at work. This alerts the collector that such activity constitutes an interference with the consumer’s employment, which is not permitted. In practice, however, collectors routinely ignore this rule and continue to call work.
There are many other harassment and intimidation techniques that cross the line from permitted to prohibited collection activity. The use of obscene or profane language, yelling, constant and unrelenting phone calls, failure to respond to written disputes, and posting debtor information are illegal activities as defined by the FDCPA.
So if you find yourself on the receiving end of illegal collection actions, what can you do to protect yourself? First of all, it is important to know and understand your rights as a consumer. You can obtain a description of your rights under the Fair Debt Collection Practices Act directly from the FTC ([http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm]).
If you believe a debt collector has violated your rights in trying to collect from you, you should not hesitate to file formal complaints with your state Attorney General (www.naag.org) as well as with the Federal Trade Commission. If enough complaints are received about a particular collector, these authorities are empowered to initiate enforcement action against them, which can result in costly fines that will make the agency or collector think twice before using such tactics. in the future. You also have the right to sue a debt collector who harasses or abuses you, or who violates your rights under the law.
One final point. Technically, the FDCPA only applies to third-party debt collectors, which includes collection agencies and collection attorneys. It does not apply to the original creditor collecting their own debt. For example, if you borrow money from a bank, the bank is not regulated by the FDCPA. However, many other public laws protect consumers from deceptive or abusive collection practices even by original creditors, and many states also have laws that parallel the FDCPA but go further and include original creditors in the definition of debt collector So if an original creditor is harassing you or has crossed the line, you should still file a complaint with your state Attorney General and the FTC. If a clear pattern of abuse emerges, the original creditor may be charged with unfair or deceptive acts or practices, either under state law or under the FTC Act that governs business conduct in our country.
In short, if you’re on the receiving end of collection harassment, don’t take it. Learn about your rights as a consumer, vigorously discuss debts you don’t think you owe, and take action yourself by filing complaints with your Attorney General and the Federal Trade Commission. By standing up for your rights, you can stop false threats and collection tactics.