The recent efforts of state and federal regulators to fight abusive debt-collection practices have drawn attention to the prevalence of abusive debt-collection practices throughout the United States. Over 220 million consumers in the United States with a credit report have at least one account in collections. Recently revealed evidence has shown that scammers have been using these debts to their advantage by making bogus and coercive calls to consumers in an effort to harass the consumers into paying or revealing personal information. It is important for consumers to understand their rights during the debt collection process and whether the debt collectors who contact them are indeed from legitimate debt collecting agencies.
Under the Fair Debt Collection Practices Act, debt collectors are prohibited from using abusive, unfair, or deceptive practices to collect debt from consumers. The Act encompasses personal, family, and household debt but does not include debt incurred from business ventures or expenses. Collectors are allowed to contact consumers by phone, letter, email, or text message but are not allowed to call you before 8am or after 9pm, unless this has been explicitly agreed upon. Additionally, if it has been specified, either orally or in writing, that a consumer cannot receive calls at work, debt collectors are unable to make such calls.
When a debt collector contacts a consumer, he must verify that the consumer is the intended recipient of the phone call. To verify a consumer’s identity, the collector may ask for a consumer’s name, address, month and year of birth, the last four digits of his or her Social Security Number. A caller who asks for a full Social Security Number, full date of birth, or other overly excessive personal information is not likely to be a legitimate debt collecting agency and consumers should be wary of such calls. Once a collector has verified a consumer’s identity, he will give the purpose of the call and if asked will give the consumer the company’s name, phone number, and address. If the caller is reluctant to reveal such information, it should be considered a red flag for the consumer. Debt collectors should treat a consumer with respect, listen to the consumer, offer options, and allow the consumer to speak with a supervisor should the consumer request to do so.
According to the Federal Trade Commission, illegal debt collection practices that consumers should be aware of include:
- Harassment: Debt collectors may not harass, oppress, or abuse consumers or any third parties they contact. A debt collector may not use threats of violence or harm, use obscene language, or publish a list of names of consumers who refuse to pay their debts.
- False statements: Debt collectors may not lie when they are trying to collect a debt. A debt collector may not falsely claim that a consumer has committed a claim, misrepresent the amount you owe, or indicate that papers they send you are legal forms if they are not.
- Unfair Practices: Debt collectors may not engage in unfair practices when they try to collect a debt. A debt collector may not deposit a post-dated check early, take or threaten to take your property unless it can be done legally, or collect any interest fee or other charge on top of the existing debt unless your contract or state laws allows this to occur.
Additionally, according to the Federal Trade Commission, debt collectors cannot threaten a consumer with arrest for not paying her debt. Debt collection agencies cannot say they will seize, garnish, attach or sell your property or wages unless they are permitted by law to take the action and intend to do so. Likewise they cannot say that legal action will be taken against a consumer if doing so would be illegal or if they do not intend to take the action.
More information from the FTC is available here.