Prohibited Debt Collection Practices

Author: Greg Artim

As we all know, the country is in the midst of an economic crisis. Delinquencies on credit card accounts are at an all time high. Many of these delinquent accounts are being sold to unsavory debt collection agencies who have purchased the debt for pennies on the dollar, who then attempt to collect the monies from you. There is a federal law that governs debt collection in this country, and it is called the Fair Debt Collection Practices Act (FDCPA). The Act sets forth some criteria, guidelines and policies that must be followed by debt collectors. The following are some examples of prohibited debt collection practices as set forth in the FDCPA:

Harassment. Debt collectors may not harass or abuse any person in the attempted collection of a debt. For example, debt collectors may not:

- call you at unreasonable times. This means that all calls should take place between 8 a.m. and 9 p.m., unless you give them authority to call at other times.

- call you an unreasonable number of times. I have had clients tell me that they received upwards of 40 phone calls in one week from a debt collector. Clearly, that is meant as harassment.

- falsely imply that they are attorneys or government representatives. In some states, like in Pennsylvania where I practice law, it is actually a crime to misrepresent oneself as an attorney.

- falsely imply that you have committed a crime. In most instances, the non-payment of a credit card account is not a crime.

In addition, Debt Collectors also may not state that:

- you will be arrested if you do not pay your debt; I am not aware of any law in the land that allows for an arrest where the individual has failed to pay a credit card invoice.

- they will seize, garnish, attach, or sell your property or wages, unless the collection agency or credit intends to do so, and it is legal to do so (garnishment of wages is currently prohibited in four states, my home state of Pennsylvania included, for the collection of most debts):

Debt Collectors may not:

- give false credit information about you to anyone;
- send you anything that looks like an official document from a court or government agency when it is not;
- use a false name.

Debt Collectors also are prohibited from engaging in Unfair practices. Debt Collectors may not engage in unfair practices in attempting to collect a debt. For example, collectors may not:

- collect any amount greater than your debt, unless allowed by law;- deposit a post-dated check prematurely;
- make you accept collect calls or pay for telegrams;
- take or threaten to take your property unless this can be done legally;
- contact you by postcard.

Article Source: http://www.articlesbase.com/law-articles/prohibited-debt-collection-practices-677042.html

About the Author

Greg Artim is a Consumer Attorney based in Pittsburgh, PA. He handles Credit Card and Collection Agency Defense matters in all of Pennsylvania. For more answers to your Fair Debt Collections Practices Act questions, please visit his website at Fair Debt Collection Practices Act .

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Many consumers have their legal rights violated by collectors without even knowing it.  The Fair Debt Collection Practices Act is designed to stop harassing, unfair, and abusive debt collection practices.

Knowing the important details of this act will help you stand up against abusive collection practices and stop collection companies from violating your rights.

There are many requirements debt collectors must abide by per the FDCPA. 

Debt collectors are not allowed to tell others details about the consumer including that they owe a debt, they cannot communicate with anyone other than the consumer more than once, not communicate through post card or have ANY markings on the outside of their envelope indicating they might be a debt collector.

Basically, collection companies cannot use the fact that they are a debt collector to bully you into paying. 

They cannot identify themselves as a debt collector to your employer, and they cannot send things in the mail to identity they are a debt collector with the intent of embarrassing or causing other hardship to you. 

Debt collectors are also not allowed to call a consumer at an unusual time or place. This includes before 8 a.m. and after 9 p.m.  A debt collector cannot contact a consumer at their place of employment if they have reason to believe this is prohibited by the employer.

They are also required to immediately cease and desist contact with you if you are represented by and attorney, or if you notify them to do so in writing or notify them that you refuse to pay the debt.

There are many restrictions of abusive and harassing practices in the FDCPA also.  Debt collectors are prohibited from using the threat of violence or other criminal means to cause harm to the consumer.

The use of obscene language is prohibited along with the publication of information that the consumer allegedly owes the debt.

Debt collectors cannot cause a consumer’s phone to ring repetitively with the intent to annoy or harass any person.  And they have to clearly identify themselves on every phone call.

False and misleading representations are also prohibited per the FDCPA.  These include the debt collector identifying themselves as an affiliate of the United States government, miss-representing the legal status of a debt, or that they are an attorney if they are not.

Your debt collectors cannot falsely represent that the nonpayment could result in the arrest or imprisonment of the consumer or the seizure of their property or garnishment of their wages unless such action is lawful and the debt collector intends on taking that action. 

Debt collectors are not allowed to communicate to any person credit information which is known to be untrue or in dispute.  They also cannot falsely issue you documentation representing itself as coming from the courts.

They also are prohibited from using any false representation or deceptive means to collect a debt.  They must identify themselves to the consumer as a debt collector and that the nature of the call is for that purpose.

Debt collectors are NOT directly affiliated with the credit reporting agencies, and they cannot claim that they are per the FDCPA.

They cannot accept post dated checks of more than 5 days, or attempt to collect more than what is owed due to the original contract. 

They must also send a statement to each consumer within 5 days of contacting the consumer.  This letter must contain many things including the amount of the debt, creditor’s name, and many disclosures specific to FTC language.

 Any violations within this act can be costly to the debt collector, especially in the civil and class action aspects. 

To learn more about consumer credit laws and how they can help you challenge your creditors and win visit www.PerfectCreditFast.com. 

Resources-         Federal Trade Commission, http://www.ftc.gov

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Due to the global financial crisis, the number of debt collection agencies in the market is increasing. They are established to offer services of collecting debts on behalf of banks, financial institutions, credit card companies and loan providers. For people who are drowned in debt, it is indeed stressful to receive irritating phone calls from debt collection agents constantly. Hence, it is important to know some useful information so that you are able to avoid the unfair collection practices.

First thing first, if possible, do your best to prevent the debt collectors from contacting you. Since you know you have substantial amount of debt, you are advised to pay the minimum amount immediately. As long as you make the minimum payment, these collectors will not reach you.

On the other hand, if you are unable to do anything on your financial situation, you need to get yourself prepared to deal with the representatives from the collection agencies. To avoid unfair treatment, when you first receive the call from the collection agent, don't be panic. You must get the details of the agent in order to make sure that it is a legitimate agency. You can ignore the calls from all the unapproved debt collection agents.

In some situations, the collection agents tend to be unprofessional and unethical. For instance, they start to threaten the debtors to provide personal financial information to them. According to Fair Debt Collection Practices Act, these agencies are not allowed to do so. The debtors have the right to decline their request. If there is any harsh action taken by the agents, the debtors are advised to lodge police report.

Keep in mind that the creditors can actually be sued for their harassment and deceptive behavior. Always be cautious in avoiding yourself from becoming the victim of unfair collection practices.  

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Debt collection companies have several rights and obligations under the law, but unfortunately the employees of such companies are not always educated about these laws before they start calling debtors to make them pay.  Reputable companies such as Cavalry Portfolio Services train their employees extensively and believe in providing the best services to their customers in an ethical way, but not all agencies have such policies.  While people who are hired for Cavalry Portfolio Services jobs are trained to understand that they cannot call people before 8 am or after 9 pm, and they are prohibited from using deception or harassment, not all debt collectors have this type of training.  This is why companies should make sure they are working with a reputable agency to collect the debts that are owed to them. 

When employees of Cavalry Portfolio Services are calling debtors to set up payment plans or arrange settlement of their account, they already know that there are specific laws regarding the collection of unpaid consumer obligations.  The two main bodies of law relating to unpaid consumer loans are the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).  These laws generally relate to how collection companies contact debtors, talk to debtors and report credit information to the credit bureaus. Cavalry Portfolio Services takes these laws very seriously and spends a great deal of time and resources on training and compliance related to these laws.  Cavalry Portfolio Services believes that there should be laws protecting consumers from deceptive and harassing collection activities and that the collection companies that intentionally violate these laws should have consequences for their actions. Cavalry Portfolio Services strives to go above and beyond regulatory expectations.

Employees at Cavalry Portfolio Services work to build relationships with customers, so they can find the best resolution for all the involved parties. Cavalry Portfolio Services jobs are not just about collecting distressed debts- they focus on helping people move forward in life. Many people are burdened with unpaid obligations and it can be difficult to get a good job or a reasonable loan with those obligations unresolved. For the millions of customers who Cavalry Portfolio Services contacts, that first phone call or letter is the first step on the path back to freedom from debt. In all communications, Cavalry Portfolio Services’ employees strive to build relationships, treat customers with respect and help customers resolve obligations. This dedication to customer service results in happier customers and happier employees. At Cavalry Portfolio Services, their motto is simple and embodies their professionalism and courtesy: "At Cavalry, the Customer is King!"

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In 1978, the Fair Debt Collection Practices Act was added, as Title VIII, to the Consumer Credit Protection Act. Its purpose is to ensure debt collection is pursued fairly rather than abusively and to give consumers a way to dispute or validate the accuracy of certain debt information. Guidelines inform collectors on how to conduct business, the rights of consumers and the penalties for violating the Act.

How exactly does one violate the Fair Debt Collection Practices Act?

There are several ways to violate the Act, beginning with a failure to follow proper protocol when obtaining information: During this process, a collector must identify himself and state merely that he is collecting information, not that the consumer in question is in debt. The collector may only approach an individual once unless otherwise requested, and communication cannot be in the form of a post card. Any documents exchanged must not reveal that the collector is attempting to collect from the debtor, and finally, once an attorney is obtained by the debtor, the collector must go through the attorney and no other individual.

Similarly, when collecting the debt, certain rules apply: Communication between the debtor and the collector may not take place at any unusual or inconvenient time or place. In most cases this means meeting no earlier than 8 a.m. and no later than 9 p.m. If an attorney has been hired, communication must go through the attorney, and a collector must not contact the debtor at his/her place of work if the collector knows the employer would object to this. Moreover, third parties may not be included without full consent from the consumer, and if the consumer indicates that communication should be stopped as a result of debts being repaid or other steps taken, the collector must cease all communication.

A third type of violation occurs when the collector harasses or abuses the debtor or provides false and/or misleading information. Harassment or abuse involves: threatening violence; using obscene language or language intended to abuse the debtor; calling repeatedly with the intent of annoyance; publishing a list of consumers who do not pay debts; advertising a debt for sale so as to coerce payment; not disclosing one's identity when calling.

False or misleading representation refers to alleging the debt is in some way connected to the United States federal government or a state government and using to a badge or other government ID to back up this claim; providing false information about a debt's status, character or amount; implying that information not siphoned through an attorney has been; making unjustifiable threats; and similar acts of misrepresentation.

If a consumer feels the Act has been violated, he may file a private lawsuit in state or federal law to collect damages and can, in fact, collect up to $1,000 plus attorney fees without proving actual damages, if claiming statutory damages and the debt is proven to have violated the Act. The Federal Trade Commission, if aware of a violation, may also take action against the collector.

For more information, read the Fair Debt Collection Practices Act at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

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