1. 7 Illegal Habits of Highly Unscrupulous Debt Collectors

    Dealing with debt collectors? Be thankful they’re not Frank Lindstrom and Kevin Medley, recently fined more than $1 million by the Federal Trade Commission for abusive and over-the-top practices: 

    “The FTC complaint included an astounding list of abuses committed by the collectors, including ‘threatening physical harm and death to [alleged debtors] and their pets, threatening to desecrate the bodies of deceased relatives, and using obscene and profane language. The defendants also allegedly improperly revealed consumers’ debts to third parties; … falsely threatened consumers with lawsuits, arrest, seizure of their assets, or wage garnishment; and falsely claimed that consumers would be liable for legal fees incurred in the collection of the debt.’” (Debt Collectors Punished for Making Death Threats by Lawyers.com) 

    But Lindstrom and Medley aren’t the only debt collectors in trouble with the FTC. In 2010, more than 140,000 collection complaints were filed with the Commission. 

    Federal authorities have begun to step up scrutiny of collectors (see CFPB Targets Debt Collectors, Consumer Reporting Agencies, Mortgage Companies, Payday Lenders & Others), but additional regulations and oversight won’t provide immediate relief for consumers being harassed or abused. That’s why it’s important to know your rights under the Fair Debt Collection Practices Act (FDCPA). 

    For your reference, here’s a look at seven practices forbidden by the FDCPA: 

    1. Debt collectors cannot call you at all hours of the night:

    “No debt collector shall … [cause] a telephone to ring or engaging any person in telephone conversation with such frequency as to be unreasonable or to constitute a harassment to the person under the circumstances or at times known to be times other than normal waking hours of the person.” (Fair Debt Collection Practices by Nexsen Pruet, PLLC) 

    2. Debt collectors cannot pretend to be someone else:

    “All debt collectors must identify themselves as such in all communications with the consumer. The first such communication must include a mini-Miranda warning that states clearly that the debt collector is ‘attempting to collect a debt and that any information obtained will be used for that purpose.’” (Arizona Consumers Use FDCPA to Challenge Debt Collectors by Pew Law Center) 

    3. Debt collectors cannot make you pay expired debts:

    “The Federal Trade Commission struck a $2.5 million settlement with one of the country’s largest debt collectors over charges that the company tricked consumers into reviving expired debts.  Asset Acceptance used multiple fraudulent practices to collect old debts. As part of the settlement it must inform consumers whose debts are too old to be legally enforceable—also called time-barred debts—that it will not sue to collect on them.” (Don’t Let Collectors Trick You Into Paying Expired Debt by Lawyers.com) 

    4. Debt collectors cannot contact you once you’ve filed bankruptcy:

    “The never ending collection calls is a big motivator for many to file bankruptcy and make them stop. When I am hired to file a bankruptcy I have my clients refer their debt collectors to my office to help slow down the phone calls. Then, once your bankruptcy case is filed the bankruptcy court will issue an order that stops all collection efforts again you. This means that they cannot call you on the phone, send you letters, garnish your wages, or even sue you. Everything must stop.” ("All Debtors are Compulsive Liars": The Training of a Debt Collector by John Skiba) 

    5. Debt collectors cannot talk to third parties about your debt: 

    “Did you know that no bill collector or creditor has the right to contact any third person about your debt, except to get information solely to locate you? This means that if a bill collector or a creditor tells anyone except you that you owe them money, they too can be sued.” (The Consumer’s Guide To Ending Debt Collection Harassment by Jay Fleischman) 

    6. Debt collectors cannot lie to get you to pay a debt:

    “A debt collector may not use false statements, such as: falsely implying that they are attorneys, that you have committed a crime, or that they operate or work for a credit bureau or misrepresenting the amount of your debt, the involvement of an attorney in collecting a debt, or indicating that papers sent to you are legal forms when they are not.” (How Do You Stop a Debt Collector from Harassing You? by Against Bill Collectors) 

    7. Debt collectors cannot threaten to have you arrested for not paying a debt:

    “Once upon a time, there was a debtor’s prison. If you couldn’t pay your debts, you were sent to jail. However, in 1833 the United States government abolished debtor’s prisons. Yet, even today debt collectors still threaten that you will be arrested if you do not pay your debt. The Fair Debt Collection Practices Act prohibits debt collectors from making this kind of false threat.” (Jail Time for Unpaid Debt by Dan Dodds) 

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