What Types of Debt Collection Practices Are Prohibited?

If you have an outstanding bill or you have fallen behind on your mortgage or credit card payments, you may be contacted by a debt collection agency. Whether you have lost your job, suffered a medical emergency, or you simply made some unfortunate financial decisions that caused you to accumulate debt, owing a substantial amount of money is stressful enough without being aggressively hounded by debt collectors. Although it is a debt collector’s job to recover funds that are in default or past due, there are certain types of debt collection practices that are not allowed.  In fact, there are laws that protect consumers from debt collectors who engage in illegal or harassing debt collection practices. If you believe that your legal rights have been violated by a debt collector, a lawyer experienced in consumer protection will assist you with the claims process.

What Should I Do if I Am Contacted by a Debt Collector?

If you have ever been contacted by a collection agency, you know how stressful it can be, particularly if the debt collector becomes threatening or aggressive. Too often, consumers who have been contacted by a debt collector fall victim to the intimidating tactics they often use. They believe that they are responsible for paying the debt, simply because they have been contacted by a debt collector. However, this is not always true. In fact, the first thing you should do if you are contacted by a debt collector is to confirm that the debt is valid. For example, if the debt is past the statute of limitations, it can no longer be collected.

According to the Fair Debt Collection Practices Act (FDCPA), debt collectors must provide the following information, in writing, within five days of contacting you about a debt:

• The exact amount of money that you owe.
• The name of the creditor.
• A statement the debt will be considered valid unless you dispute the debt within 30 days of receiving the notice.
• If you dispute any portion of the debt within the 30 days, the debt collector must send you a copy of the judgment against you.
• If the original creditor is not the same as the current creditor, the debt collector must provide you with the name and address of the original creditor.

If the debt is invalid or the statute of limitations has expired, you can dispute the debt by sending a certified letter saying that you are contesting the validity of the debt. A consumer protection lawyer can assist you with this process by reviewing the information, confirming the statute of limitations, drafting a letter to the collection agency, and managing all communication with the debt collector moving forward.

What Are Examples of Illegal Debt Collection Practices?

Although debt collectors have a job to do, they may not resort to unfair or abusive debt collection practices. According to the Bureau of Consumer Financial Protection’s annual report, close to 50 percent of people said that they were told to pay a debt that was not valid. In addition, 25 percent were charged with a debt associated with an identity fraud incident. Unfortunately, these debt collectors can be very convincing, and consumers who are not aware of their rights may pay the debt to avoid ruining their credit or having to deal with aggressive creditors. The following are examples of some of the most common debt collection practices that are prohibited by the FDCPA:

• Communicating with third parties: Collection agencies may not contact third parties about your debt. However, there are a few exceptions, including the following:
  – Debt collectors may contact your lawyer if they know that you have legal representation. If you are represented by a consumer lawyer, the debt collector cannot contact you directly unless you give them permission or your lawyer does not respond to the debt collector’s communications.
  – The original creditor.
  – A credit reporting agency.
  – Your spouse or your parents, but if you have sent a letter to the collection agency requesting that they cease communication, they must honor that request.
• Communicating with you: When communicating with you directly, debt collectors must state that they are attempting to collect a debt, and that the information that you provide will be used for that purpose. The debt collector must also disclose that all communications are from a debt collection agency and provide his or her name, and the collection agency’s name in subsequent communications. Debt collectors may engage in the following behavior:
  – Contact you at an unusual or inconvenient time, including early morning or late at night
  – Contact you directly if you are being represented by a lawyer
  – Contact you at work if the debt collector knows that you may not receive phone calls at your palace of employment
• Harassment: It is illegal for debt collectors to harass, abuse, or oppress you, or any third parties in their attempt to collect the debt. Specifically, they may not engage in the following behaviors:
  – Threaten violence or cause physical harm to you, a family member, your property, or your reputation
  – According to the Consumer Financial Protection Bureau’s Final Rule, debt collectors may not contact you more than seven times in seven consecutive days or within seven days of an initial conversation with you.
  – Resort to obscene or abusive language
  – Publish your name on a list of consumers who do not pay their debts
  – Call you repeatedly
  – Does not identify him or herself as a debt collector when placing calls
  – List your debt for sale to the public
• False or misleading statements: Debt collectors may not resort to telling lies or intentionally misleading consumers. For example, they may not engage in the following:
  – Claim to be a member of law enforcement or connected to the federal, state, or local government. If the debt collector does make a claim such as this, he or she is most likely lying, unless the individual is attempting to collect unpaid child support.
  – Provides false information about the amount of money you owe, or the compensation that the collection agency will receive.
  – Identifies him or herself as an attorney.
  – Threatens imprisonment, or that your property will be seized unless the collection agency takes action.
  – Threatens action that is not allowed. For example, if the collection agency sent a so-called final notice letter, it cannot send a follow-up letter demanding payment.
  – Accuse you of a crime that you did not commit.
  – Send you falsified documentation.
  – Use a false business name.
• Unfair practices: When attempting to collect a debt, collection agencies may not engage in the following unfair practices:
  – Collect more money than what you owe, unless your state law allows the collection agency to charge an additional fee
  – Deposit a check before the date posted on the check
  – Communicate with you via postcard
  – Accept a check that is postdated more than five days, unless the agency notifies you three to 10 days in advance of when it plans to deposit the check
  – Cause you to accumulate charges by concealing the purpose of the call
• Debt parking: This is also known as passive debt collection, in which debt collectors will place false or questionable debts onto a consumer’s credit report without notifying the consumer. Unfortunately, these often go unnoticed until the consumer applies for a loan or a job. Oftentimes, rather than filing a dispute, the consumer will pay the debt to avoid any problems with the approval process.

How Can I Prevent Debt Collectors from Contacting Me?

According to the Telephone Consumer Protection Act (TCPA), consumers who receive calls on their cell phones from debt collectors or creditors may file a lawsuit against the person or organization making the call if the consumer did not give consent to contact them on their cell phone. Companies that violate the TCPA may be liable for up to $1,500 in damages for each violation. You may also stop debt collectors from contacting you by writing a letter instructing the debt collector to terminate all communication. After receiving the letter, the debt collector may no longer contact you, except to notify you that there will be no further contact. It is important to understand, however, that just because you will no longer be contacted by the debt collector does not mean that you are not responsible for the debt. The creditor or the collection agency could still sue you if you fail to pay the debt.

If you have been harassed or your legal rights have been violated by a debt collector, you are urged to contact the office of Francis Mailman Soumilas, P.C. We will thoroughly investigate the details of your claim, ensure that your legal rights are protected, and secure the best possible settlement outcome.  Call us at 215-735-8600 or contact us online today to schedule a free consultation. With offices located in Philadelphia, Chicago, New York, and San Francisco, we serve clients nationwide.