Debt Collectors: Stop Abusing Consumers, Says Senator Franken

Earlier this year, Senator Al Franken introduced the “End Debt Collector Abuse Act of 2012” to update the Fair Debt Collection Practice Act that’s been in place for nearly 45 years. From Lawyers.com:

“The End Debt Collector Abuse Act addresses gaps in the federal debt collection law that have left patients vulnerable. It would update the FDCPA in general to help consumers better protect themselves and keep debt collectors honest. ‘Some unscrupulous debt collectors use intimidation to collect debts, going so far as to seek arrest warrants when consumers fail to respond to alleged unpaid debts,’ notes Franken in a summary of the bill. ‘Most disturbingly, there have been recent reports of collectors targeting patients in emergency rooms and using private health information to pressure consumers to pay medical debts.’” (Federal Bill Spotlights Debt Collection Abuse – Again) 

Passage of the new legislation isn’t likely – it’s the second time Senator Franken has proposed the law – but it serves as a useful warning for consumers against the growing problem of debt collector abuse. 

What types of abuse is Senator Franken trying to stop? Here are three examples: 

1. Harassing patients in the hospital:

“There you are, in the hospital, you come out of surgery hoping to see your loving family there to support you, but instead a debt collector is there asking you when you are going to pay your bill! It sounds stupid but that apparently is a new tactic being used by medical debt collector Accretive Health.” (Debt Collector Harasses Patients in Hosptial by John Skiba) 

2. Lying about expired debt:

“Asset Acceptance purchases old debts from companies at a fraction of the face amount and then attempts to profit by collecting on those debts. Under the settlement, the company has agreed to pay a $2.5 million civil penalty to settle FTC charges that it made misrepresentations when trying to collect old debts, including failure to inform consumers when a legal action to enforce the debt would be time-barred.” (Federal Crackdown on Debt Buyer Emphasizes Need for Consumer Disclosures by Venable LLP) 

3. Sending people to jail for uncollected debt:

“The federal government did away with Debtors Prison in 1833, but the practice lingered in some of the states. It is reported that some states still allow debt collectors to seek arrest warrants for debtors when all other collection attempts have failed… EDCAA will forbid a debt collector from seeking ‘a warrant for the arrest of a debtor or any other similar request that a debt collector knows or should know would lead to the issuance of an arrest warrant…’” (In Introducing EDCAA, the Senate’s Funnyman Al Franken Sees No Humor in Debt Collection Abuses by Joseph A. Mullaney, III) 

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Related reading:

• Sending Collection Letter ‘In Care of’ Debtor’s Employer Violates FDCPA, Ninth Circuit Holds - Ballard Spahr LLP 

• Eleventh Circuit Holds Loan Servicer May Be Debt Collector Subject to FDCPA - BuckleySandler LLP 

• Asset Acceptance Pays Nearly 3 Cents Per Dollar to Control $2 Billion in Consumer Debt - Joseph A. Mullaney, III 

• To Violate FDCPA, Collection Letter Must ‘Expressly’ Require Written Debt Dispute, Ninth Circuit Holds - Ballard Spahr LLP 

• FTC Settles Privacy, Data Security Charges Based On Peer-to-Peer File Sharing Against Two Firms - BuckleySandler LLP 

• Federal Trade Commission Brings Two Enforcement Actions Related to Peer-to-Peer Networks - Mintz Levin 

• Consumer Wins Spectacular Victory Against Debt Collector Stock & Grimes - Joseph A. Mullaney, III 

• Sixth Circuit Holds Foreclosure Filing Before Transfer of Mortgage and Note May Violate FDCPA - BuckleySandler LLP 

• Supreme Court To Decide Whether Bad Faith Needed for Award of Costs under FDCPA - Ballard Spahr LLP 

• Eleventh Circuit Court of Appeals Finds that “Dunning” Notice Enforcing a Security Interest May Give Rise to FDCPA Claim - BuckleySandler LLP 

• Debt Collectors Unhinged - John Skiba 

• Federal Appeals Court Finds Plaintiff States FDCPA Claim Against Servicer, Creditor When Acquiring Debt Purportedly in Default - BuckleySandler LLP 

• State Law Update: Recent Changes in Maryland, Minnesota, and Mississippi - BuckleySandler LLP 

• More Consumers Suing Over Debt Collection Harassment - Lawyers.com 

• The Rise of the Debt Buyers - John Skiba 

• Don’t Let Collectors Trick You Into Paying Expired Debt - Lawyers.com