The following is a guest post from Sergei Lemberg, whose firm represents consumers in matters relating to fair debt collection, fair credit reporting, and lemon law.
As the economy has worsened, many of those in the debt collection industry have ramped up their efforts to squeeze consumers into paying whatever money they can toward overdue bills. Although most people simply aren’t able to pay, debt collectors often attempt to turn up the heat. The result? Debt collectors engage in tactics that are illegal under the Fair Debt Collection Practices Act (FDCPA).
Once you have a solid understanding of which debt collection practices cross the line, you’re in a better position to fight back. The FDCPA enables consumers to sue debt collection agencies that violate the law, and to be awarded up to $1,000 in damages along with court costs and attorney fees.
Here are three common – and illegal – debt collection tactics that desperate collectors often use:
1. Threatening to sue over time-barred debt. One segment of the debt collection industry consists of what are termed debt buyers. Debt buyers typically purchase hundreds or thousands of accounts that have been charged off by the original creditor as uncollectible, and that have often been subject to unsuccessful collection attempts by other debt collection agencies. Often, there is very little documentation for the debt, and much of it is very old. However, the cost of buying the debt is so low (pennies on the dollar), that there is enormous potential for profit. The problem is that each state has a statute of limitations (it varies by state), and a debt collector has no legal recourse to collect debt that is past the statute of limitations. Nonetheless, some debt collectors threaten to sue consumers in court for this time-barred debt. This is a violation of the FDCPA, since the FDCPA says that debt collectors can’t threaten to take an action that they’re not legally allowed to do or have no intention of doing.
2. Leaving messages on answering machines and voicemail. One of the provisions of the FDCPA is that debt collectors can’t discuss a debt with third parties, such as family members, friends, and coworkers. A court decision set a precedent whereby a debt collector can’t leave a message that mentions the debt. The rationale is that a third party could overhear the message, and that it would constitute an illegal third-party communication. So, while a debt collection agency can leave a message asking the consumer to call a certain number, it isn’t allowed to say or imply that it’s calling regarding a debt.
3. Calling at work. The FDCPA says that a debt collector can’t call a consumer’s place of employment if the consumer has told the debt collector that he or she isn’t allowed to receive calls at work. The consumer doesn’t have to put it in writing, but simply has to verbally tell the debt collector not to call at work. If the debt collector continues to call, it may also be a violation of the FDCPA’s prohibition against calling at inconvenient times or places.
If you’ve been the victim of illegal debt collection tactics, it’s worth your time to speak with a lawyer who is familiar with the FDCPA. In addition to the avenues of redress afforded to you by the FDCPA, once you’ve notified a debt collection agency that you have an attorney, the agency is no longer allowed to contact you directly. That’s a good first step in getting the debt collection nightmare to stop.