How to Protect Yourself from Abusive Debt Collectors

How to Protect Yourself from Abusive Debt Collectors

Most people do their best to pay their bills on time. However, even with the best of intentions, anyone can fall behind due to circumstances beyond their control, such as injury, illness, job loss, or divorce.  Falling behind financially, under those circumstances, is stressful enough, but harassment from overly aggressive debt collectors can make the problems much worse.  In 1977, Congress investigated this issue and found that “Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.”

Congress acted against these abuses in 1977 when the Fair Debt Collection Practices Act (“FDCPA”) was passed into law. The law prohibits debt collectors from engaging in many of the abusive practices that were causing harm to consumers.  If a debt collector violates the law, the consumer has the right to file a lawsuit against the debt collector in actual damages (such as medical bills or lost wages) caused by the violation. If actual damages cannot be proven, the consumer may still be awarded up to $1,000. The law also requires the violator to reimburse the consumer for their attorneys’ fees.  The law also enables the consumer to report violations to the Federal Trade Commission or the Consumer Financial Protection Bureau, which can assess fines and other penalties against the violator.

Debt collectors must follow the rules when they contact you.

•    When a debt collector first contacts you, they must tell you that they are attempting to collect a debt and that any information obtained from you will be used for that purpose.
•    Each time a debt collector contacts you, they must give you their name, and the name of the collection agency they work for.
•    Within five days after the debt collector contacts you, they must send a written “validation notice” stating how much you owe, the name of the creditor, and what to do if you dispute the debt.
•    If you dispute the debt, you must send the debt collector a letter within 30 days of receiving the “validation notice.” This letter should be sent by certified mail with a return receipt requested so that you can verify that the debt collector received it.
•    If you dispute the debt, the collector must stop contacting you. However, they may begin contacting you again if they send written verification of the debt (such as a copy of a contract or bill).
•    Even if the debt is valid, you still have the right to request that the collector stops contacting you. This letter should also be sent by certified mail with a return receipt requested. Once they receive the letter, they can no longer contact you except to tell you that there will be no further contact or that they intend to take legal action to enforce the debt such as filing a lawsuit.

Additionally, debt collectors are not allowed to do the following:

•    Threaten violence or harm.
•    Publish a list of names on a “deadbeat list.”
•    Use obscene, profane, abusive language, or insults.
•    Repeatedly use the telephone to harass or annoy someone.
•    Contact you at work if you tell them or they otherwise know that you cannot receive such calls at work.
•    Contact your friends, relatives, or others except to learn your whereabouts. (If they do it for that limited purpose, they must do it without informing them that they are attempting to collect a debt from you.)
•    Make false statements (Such as falsely claiming to be attorneys, government agents, or employees of a credit reporting company, using fake legal forms, or using a fake company name).
•    Misrepresent the amount you owe or collect interest or fees not authorized by the contract that created the debt or state law.
•    Falsely threaten you with arrest, garnishment, loss of property, or legal action that they are not permitted or otherwise have no intention of taking.

The FDCPA only applies to personal, family, and household debts such as credit cards, auto loans, home mortgages, and medical bills. However, it does not cover business debts. Additionally, it only covers debt collectors (such as collection agencies or lawyers) and not original creditors. However, many states have laws similar to the FDCPA that cover debts or creditors not covered by the FDCPA. Contact a local debtors’ rights attorney, the Federal Trade Commission website, or your state’s attorney general’s website to learn more.