If you’re behind on your bills and receiving collection calls, you’re likely to hear some very threatening statements from collectors. While most collections professionals try to stay within the limits defined by the Federal Fair Debt Collection Practices Act (FDCPA), many others regularly exceed the limit. Last year, the Federal Trade Commission (www.ftc.gov) received more than 58,000 complaints about collection agencies, a number that represents 17% of the total number of complaints received by the FTC. Consumers complain more about the collections industry than most other industries combined.
Collections professionals would likely respond that the sheer size of the industry and the sheer volume of collections activity are responsible for the large number of complaints. However, only a small percentage of violations are actually reported by consumers, so the data collected by the FTC represents only a tiny fraction of the true scope of the problem. Despite this, a pattern of abusive and illegal collection activity has been well documented by the FTC, and it’s getting worse instead of better.
Here are some common threats from collection agencies:
“We’ll take your house if you don’t pay this bill right away.” This is a false threat. Unless the debt to be collected is secured by the home in question (ie, a mortgage or home equity loan), the lender has no authority to take your home away from you.
“If you don’t pay this bill today, we will 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 or accusing him of committing a crime is totally against the rules.
“We don’t care that you sent a notice to stop communications. We’ll call you anyway.” The FDCPA gives you the right to stop a collection agency’s efforts to contact you. Failure to comply with a notice to cease communications is a clear violation of federal law.
“We will garnish your wages to collect this debt.” A collector can only threaten actions that they have legal authority to take, and the vast majority of collection agencies have no legal authority. Your wages can only be attached by a creditor after they have won a judgment against you in a court case.
“We know where you live, so you better pay.” Yes, threats of violence still exist in this industry. Nearly 300 complaints against collectors received by the FTC last year cited threats of violence as the cause of the complaint. This is absolutely illegal.
Aside from the usual bogus threats, gatherers also use other tactics that are illegal. For example, it is a clear violation of the FDCPA to discuss your debt with a third party. Still, collectors routinely call neighbors, relatives, and employers for information about debtors. As long as the collector doesn’t talk about the actual debt issue, he’s still 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.
Because many debtors have turned to monitoring their home phone calls to reduce the relentless barrage, debt collectors often call work when they can get an office number. In theory, a consumer can get the collector to stop phoning the office simply by declaring that they are not allowed to take personal phone calls at work. This informs the collector that such an activity constitutes an interference with the consumer’s employment, which is not permitted. However, in practice, collectors routinely ignore this rule and continue to call at work.
There are many other harassment and intimidation techniques that cross the line from legal to illegal collection activities. Use of obscene or profane language, shouting, constant and unrelenting phone calls, failure to respond to written disputes, and posting debtor information all constitute illegal activities under the FDCPA.
So what can you do to protect yourself if you become a victim of illegal fundraising? First and foremost, it is important to know and understand your rights as a consumer. For a description of your rights under the Fair Debt Collection Practices Act, contact the FTC directly ([http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm]).
If you believe that a collector has violated your rights by attempting to collect money from you, you should not hesitate to file formal complaints with your state Attorney General (www.naag.org) and the Federal Trade Commission. If enough complaints are received about a particular collector, these authorities have the power to bring an enforcement action against them, which can result in expensive fines that will make the agency or collector think twice about using such tactics in the future. You also have the right to bring a personal complaint against a collector who is harassing or abusing you, or otherwise violating your legal rights.
One last point. The FDCPA technically only applies to outside collection agencies, which include collection agencies and debt collection attorneys. It does not apply to the original creditor when collecting his own claim. For example, if you borrow money from a bank, the bank is not subject to the FDCPA. However, numerous other public statutes protect consumers from deceptive or abusive collection practices, even by original creditors, and many states also have laws that mirror the FDCPA but go further to include original creditors in the definition of collections. So if an original creditor has harassed you or crossed the line, you should still file a complaint with your state’s Attorney General as well as the FTC. If a clear pattern of abuse emerges, the original creditor may be charged with an unfair or fraudulent act or practice, either under state law or under the FTC statute, which governs business conduct in our country.
In summary, if you are the victim of debt collection harassment, you should not take it easy. Educate yourself about your rights as a consumer, vigorously dispute debt you believe you don’t 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 fake threats and illegal collection tactics.