Maybe they received an injury due to an automobile accident. Maybe they purchased
a car that turned out to be a lemon. Perhaps they were discriminated against
in their workplace and lost their job. Or maybe they are getting a divorce.
Whatever the reason, your client is now strapped for cash and the debt collectors
Many people fall behind in their bills. On top of trying
to keep food on the table and the lights on, your client is experiencing severe
anxiety every time the phone rings. Is it the debt collector calling again?
Debt collectors add to your client’s initial problem with harassing and
abusive phone calls at home and at work, and our clients don’t want to
talk about it due to embarrassment and shame.
Also, with the increase in identity theft, more and more
consumers are finding themselves on the other end of the phone with a debt
collector. Often, the consumer is not believed when they state that the debt
is not theirs or that they are a victim of identity theft. The phone calls
and letters just keep coming.
The Fair Debt Collection Practices Act (FDCPA) is a federal
law that regulates what actions a debt collector can and cannot take in trying
to collect a debt. It covers personal, family and household debts. Business
and commercial debts are not covered. This underutilized law can help your
clients sleep better at night without breaking into a cold sweat every time
the phone rings.
The deck is stacked against your clients, as most do not
know their rights in dealing with debt collectors. Many believe that they have
to suffer the abuse since they owe the debt. On the contrary, consumers have
more rights than most would think, and consumers should not hesitate to shield
themselves from these sharp practices and exercise their rights under the FDCPA.
Debt collectors may communicate by mail, in person, by telephone
or telegram. A debt collector cannot contact a person at times or in places
that they know are inconvenient, such as at work if the employer does not permit
it. A debt collector cannot contact a person before 8:00 a.m. or after 9:00
If a written request is sent to the debt collector demanding
that they stop all communication, the debt collector must stop contact immediately.
If the debt collector is advised that the consumer is represented by an attorney
concerning the debt, the debt collector cannot communicate directly with the
consumer except through the lawyer.
A debt collector cannot contact any third parties about the
debt specifically. A debt collector can contact other people once (and once
only) in an effort to locate the consumer. They cannot call family members
or neighbors about the debt. Debt collectors are not permitted to ask family
and neighbors to pass on phone messages or tell other people that they are
attempting to collect a debt.
Within five days after the first contact with a consumer,
a debt collector must send written notice that includes all of the following:
(1) the amount of the debt, (2) the name of the creditor to whom the debt is
owed, (3) a statement that unless within 30 days after receipt of the notice
the validity of the debt is disputed, or any portion of it, the debt will be
assumed to be valid by the debt collector, (4) a statement that if the debt
collector is notified in writing within the 30-day period that the debt or
any portion thereof is disputed, the debt collector will obtain verification
of the debt or a copy of a judgment and mail such verification to the consumer,
(5) a statement that upon written request within the 30-day period the debt
collector will provide the name and address of the original creditor if different
from the current creditor, and (6) a statement that the communication is from
a debt collector attempting to collect a debt and that any information obtained
will be used for that purpose.
Every debt collector who tries to collect the debt must provide
their own 30-day validation notice, even if a previous debt collector has already
given such notice. If a debt is disputed in writing within the 30-day validation
period, a debt collector cannot continue to collect on the debt until they
have sent proof of the debt or a copy of the judgment.
Debt collectors may not use any language, communication or
conduct to harass, oppress or abuse any person. This includes the use of threats
of violence or harm to the person, property or reputation; advertising the
debt or publishing a list of consumers who refuse to pay their debts, except
to a credit bureau; using obscene or profane language; or calling people without
False statements are prohibited. For example, a debt collector
cannot falsely imply that he is an attorney or government representative. They
cannot falsely imply that a person committed a crime by not paying a debt.
Debt collectors cannot misrepresent the character, amount or legal status of
the debt. They cannot indicate that papers being sent are legal papers when
they are not.
A debt collector may not use threats when trying to collect
a debt. This includes threats like the following: (1) the consumer will be
arrested if they do not pay the debt, (2) the consumer’s property or
wages will be seized, garnished, attached or sold, unless the collection agency
or the creditor intends to do so and they have the right to do so.
Debt collectors routinely report credit information to the
major credit bureaus but often fail to report that a debt is disputed, as required
by law. Further, after a debt is discharged in bankruptcy some debt collectors
nevertheless continue collection efforts or try to get the consumer to reaffirm
Consumers are entitled to file a lawsuit against any debt
collector who violates the FDCPA. In short, the FDCPA allows a consumer to
recover actual damages, statutory damages of up to $1,000 and attorney’s
fees and costs. While this may seem like a modest amount, to debt collectors
who violate the law there is much more at stake: increased insurance rates,
deceased collection rates, potential governmental regulatory action and the
spiraling costs of defending a lawsuit for their illegal conduct.
Sonya A. Smith-Valentine is a member of the Valentine Legal Group, LLC, in
Greenbelt, Maryland. She concentrates her practice on debt collection harassment
and credit report disputes.