Illegal Methods That Debt Collectors May Not Use
Richard Fonfrias, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Fonfrias Law Group, LLC
Many people who owe money feel powerless. They have debts they can’t pay, and are often embarrassed and humiliated.
If you’re a debtor, you’ll be glad to know that federal law protects you from many methods used by collection agencies.
The Federal Trade Commission (FTC) is the nation’s consumer protection agency. It monitors what debt collectors do and enforces the terms of the Fair Debt Collection Practices Act (FDCPA). This act prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Under the FDCPA, a debt collector is a person who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.
Here are practices that are off limits for debt collectors
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
- use threats of violence or harm;
- publish the names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
- use obscene or profane language; or
- repeatedly use the phone to annoy someone.
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
- falsely claim that they are attorneys or government representatives;
- falsely claim that you have committed a crime;
- falsely represent that they operate or work for a credit reporting company;
- misrepresent the amount you owe;
- indicate that papers they send to you are legal forms if they aren’t; or
- indicate that papers they send to you aren’t legal forms if they are.
Empty threats. Debt collectors also are prohibited from saying that:
- you will be arrested if you don’t pay your debt;
- they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
- legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.
Illegal acts. Debt collectors may not:
- give false credit information about you to anyone, including a credit reporting company;
- send you anything that looks like an official document from a court or government agency if it isn’t; or
- use a false company name.
Unfair practices. Debt collectors may not:
- try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
- deposit a post-dated check early;
- take or threaten to take your property unless it can be done legally; or
- contact you by postcard.
If you think a debt collector has violated the law…
You have the legal right to sue a collector in a state or federal court within one year from the date the law was violated. Speak first with a qualified legal professional. Your attorney will be able to advise you whether it is in your best interest to proceed with legal action against creditor harassment.
If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages.
You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.
In addition, you should –
Report any problems you have with a debt collector to your state Attorney General’s office, the Federal Trade Commission, and the Consumer Financial Protection Bureau.
Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act.Your Attorney General’s office can help you determine your rights under your state’s law.