Fair Debt Collection
What every consumer should know about the collection
of debts
It is first important to state that we all have a legal and a
moral obligation to pay our just and owing debts whenever possible.
However, bad things happen to good people every day and it is not
always possible to stay current with all of one’s bills.
People lose their jobs, get sick and don’t have adequate
medical insurance, or they get divorced. At this point choices
must be made. The health and welfare of your family should come
first. When the choice is whether to pay the mortgage or the visa
bill, common sense dictates that you pay the mortgage first. Likewise,
when the choice is buy groceries to feed the children or pay the
mortgage, common sense also dictates that you buy the groceries.
When times are tough, food and shelter must come first. Unfortunately,
when one must make difficult decisions like these, it is only a
matter of time before they will be contacted by a debt collector.
The second important thing to note is that not all debt collectors
are bad. In fact, the majority of them are careful to follow the
law. The remainder of this article will focus on your rights when
you run into a debt collector who chooses not follow the law and
attempts to collect the debt using abusive and/or harassing techniques.
PURPOSE OF THE ACT: 15 U.S.C. §1692
(a) There is abundant
evidence of the use of abusive, deceptive, and unfair debt collection
practices by many debt collectors. 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.
(b) Existing laws and procedures for redressing these injuries are
inadequate to protect consumers.
(c) Means other than misrepresentation
or other abusive debt collection practices are available for the
effective collection of debts.
(d) Abusive debt collection practices are carried on to a substantial extent in interstate
commerce and through means and instrumentalities of such commerce. Even
where abusive debt collection practices are purely intrastate in character,
the nevertheless directly affect interstate commerce.
(e) It is the purpose of this subchapter to eliminate abusive debt collection
practices by debt collectors, to insure that those debt collectors
who refrain from using abusive debt collection practices are not
competitively disadvantaged, and to promote consistent State action
to protect consumers against debt collection abuses.
KEY DEFINITIONS: 15 U.S.C. §1692a
(2) The term “communication” means the conveying of information
regarding a debt directly or indirectly to any person through any medium.
(3) The term “consumer” means any natural person obligated
or allegedly obligated to pay any debt.
(5) The term “debt” mans any obligation or alleged obligation
of a consumer to pay money arising out of a transaction in which
the money, property, insurance, or services which are the subject
of the transaction are primarily for personal, family, or household
purposes, whether or not such obligation has been reduced to judgment.
(6) The term “debt collector” means any person who uses
any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is the collection of
any debts, or who regularly collects or attempts to collect,
directly or indirectly, debts owed or due or asserted to be owed
or due another.
WHAT DOES THE ACT REQUIRE?
The
Federal Fair Debt Collection Practices Act requires that debt collectors
treat you fairly and prohibits certain methods of collecting debts.
WHO DOES THE FEDERAL ACT PROTECT?
The Federal Act is primarily intended to protect consumers. The
Act defines a consumer as any natural person obligated or allegedly
obligated to pay any debt. Consumers are the ones who are most
often harassed or abused by debt collectors. However, the Federal
Act further states that debt collectors are not to harass, oppress,
or abuse any person in connection with the collection of a debt.
This means that any person who is harassed by the collector has
the right to file a suit under the Federal Act.
WHO MUST COMPLY WITH THE FEDERAL ACT?
The Federal Act governs the collection of debts by debt collectors.
Debt collector is defined by the statute as any person or business
who’s principal purpose is the collection of debts or who
regularly collects or attempts to collect debts owed or due to
another. This means that the actual creditor is not subject to
the Federal Act. Generally the Federal Act kicks in when the
original creditor assigns the debt to an outside collection agency.
That doesn't mean that original creditors are free to harass
and abuse people. The state of Florida has a consumer collection
statute similar to the Federal statute which protects people
from abusive behavior from both original creditors and debt collectors.
HOW AND WHEN MAY A DEBT COLLECTOR CONTACT YOU?
A debt collector may contact you in person, by mail, telephone,
or fax. The collector is not allowed to contact you at any unusual
time or place or a time or place the collector should have reasonably
known to be inconvenient to you. The Act states that the collector
shall assume that the convenient time for a consumer to be contacted
is between 8:00 a.m. and 9:00 p.m.
MAY A DEBT COLLECTOR CONTACT ANYONE ELSE ABOUT YOUR DEBT?
If you hire an attorney to represent you and the collector knows
that you have hired the attorney, the collector can not contact
you any more about the debt but instead must contact your attorney.
Other than this, debt collectors are limited to contacting third
parties only for the purpose of obtaining or verifying location
information. This means the collector may call your friend or
relative to find out where you live, what your telephone number
is or where you are employed. The collector may only contact
your friend or relative one time for this purpose and they are
not allowed to tell them that you owe money to another. However,
the collector is not allowed to call your friend, relative or
neighbor and request that they give you a telephone message.
This is a technique many of my clients complain about.
WHAT IF YOU BELIEVE THAT YOU DON’T OWE THE MONEY?
Within 5 days after you are first contacted by a debt collector,
the collector must send you a written notice telling you the
following:
- the amount of the debt,
- the name of the creditor to whom the debt is owed,
- a statement that unless you dispute the validity of the debt,
or any portion thereof within 30 days of your receipt of the
notice the debt collector will assume the debt to be valid,
- a statement that if you notify the debt collector in writing
within 30 days of receiving the notice that you dispute the debt
or any portion thereof, the debt collector will obtain verification
of the debt or a copy of a judgment against you and a copy of
such verification or judgment will be mailed to you by the debt
collector,
- a statement that if you notify the debt collector in writing
within 30 days of receiving the notice, the debt collector will
provide you with the name and address of the original creditor,
if different from the current creditor,
- and, a statement that the communication is from a debt collector
attempting to collect a debt and that any information obtained
will be used for that purpose.
If you are contacted by a debt collector and you do not believe
you owe the money, you should send them a letter advising the collector
that you dispute the debt within 30 days of receiving the notice
described above. When you timely dispute the validity of the debt,
the debt collector cannot continue their collection efforts against
you until they provide verification of the debt or a copy of the
judgment. Therefore, it is very important that you send a dispute
letter to the debt collector within 30 days of receiving the notice.
If and when the collector provides you with proof that you owe
the debt by, for example, sending you a copy of a bill showing
the amount owed, they can resume collection activities.
WHAT TYPES OF DEBT COLLECTION PRACTICES ARE PROHIBITED?
- Harassment. Debt collectors are not allowed
to harass, oppress, or abuse you or any third parties they contact.
Some examples of harassment would be using threats of violence
or harm; publishing a list of consumers who refuse to pay their
debts; using obscene or profane language; or repeatedly using
the telephone to annoy someone.
- False Statements. Debt collectors are not
allowed to make false or misleading statements when collecting
debts. Some examples of false statements would be implying that
failure to pay the debt is a crime; misrepresenting the amount
of your debt; indicating that papers being sent to you are legal
forms when they actually are not; saying you will be arrested
if you do not pay; stating that they will seize, garnish, attach
or sell your property or wages unless the collection agency or
creditor intends to do so and it is legal to do so; the collector
is also not allowed to provide false credit information about
you to anyone including a credit bureau.
- Unfair Practices. Some examples of unfair
practices would be depositing a post-dated check prematurely;
use deception to make you accept collect calls or telegrams;
take or threaten to take your property unless this can be done
legally; or contact you by postcard.
WHAT CAN YOU DO IF YOU BELIEVE A DEBT COLLECTOR HAS VIOLATED
THE LAW?
If you believe a debt collector has violated the law in their attempt
to collect a debt from you, you have the right to sue in state
or federal court within one (1) year from the date the law was
violated. If you win, you may recover actual damages you suffered,
statutory damages up to $1,000 plus court costs and attorney fees.
If you believe you are the victim of abuse by a debt collector,
call us as soon as possible for a free consultation. |
