If you have ever been behind on your bills and been on the receiving end of collection phone calls, you have probably heard collection agents make some very threatening statements. While most debt collection professionals refrain from illegal collection tactics and stay within the boundaries defined by the Federal Fair Debt Collection Practices Act (FDCPA), many others cross the line on a regular basis.
In 2015, the Federal Trade Commission (www.ftc.gov) received more than 897,000 complaints about debt collectors, representing 29% of the total number of complaints received all year. In fact, The FTC has sued over 30 debt collection companies and individuals for violating the law and has permanently banned them from the industry.
Consumers complain about the collection industry more than all other industries combined.Collection professionals would probably respond that the enormous size of the industry and the sheer volume of collection activity accounts for the large number of complaints. However, only a small percentage of violations are actually reported by consumers, so the data collected by the FTC represents only a tiny fraction of the true scope of the problem. Even so, a pattern of abusive and illegal collection tactics has been well documented by the FTC, and it is getting worse instead of better.
The following are some common illegal collection tactics and harassment made by debt collectors:
- “We’re going to take your house unless you pay this bill immediately.”This is a bogus threat. Unless the debt being collected is secured by the house in question (i.e., a mortgage or home equity loan), the creditor does not have the power to take your house away from you.
- “If you don’t pay this bill today, we’re going to have a warrant issued for your arrest.”Nonsense. Failure to pay a debt is a civil matter, not a criminal matter. Threatening a debtor with jail time or accusing them of committing a crime is totally against the rules.
- “We don’t care that you sent a cease communication notice. We’re going to call you anyway.”The FDCPA gives you the right to terminate contact efforts by a debt collector. Failure to respect a cease communication notice is a clear violation of Federal law.
- “We’re going to garnish your wages to recover this debt.”A collector can only threaten action it has the legal authority to take, and the vast majority of collection agencies have zero legal authority. Your wages can only be garnished by a creditor after they have won a judgment against you in a lawsuit.
- “We know where you live, so you better pay up.”Yes, threats of violence still happen in this industry. Nearly 3000 complaints against collectors received by the FTC last year cited the threat of violence as the cause of the complaint. This is absolutely illegal.
Other Illegal Collection Actions
Aside from the above bogus threats, collectors also use other illegal collection tactics. For example, discussing your debt with a third party is a clear violation of the FDCPA. Yet collectors routinely call neighbors, relatives, and employers to obtain information on debtors. So long as the collector does not discuss the actual matter of the debt, they still have their toes on the right side of the line. But as soon as they mention or even hint that they are calling about a debt, they have crossed the line.
Since many debtors have taken to screening their phone calls at home to cut down on the relentless barrage, debt collectors frequently call them at work (when they can obtain the number). In theory, a consumer can get the collector to stop calling their workplace simply by stating that they are not allowed to receive personal phone calls at work. That puts the collector on notice that such activity constitutes interference with the consumer’s employment, which is not permitted. In practice, however, collectors routinely ignore this rule and continue to call at work.
There are many other illegal collection tactics and techniques of harassment and intimidation that cross the line from permissible to impermissible collection activity. Use of obscene or profane language, shouting, constant and unrelenting telephone calls, failure to respond to written disputes, and publication of debtor information all constitute illegal activity as defined by the FDCPA.
What can you do to protect yourself?
If you are on the receiving end of illegal collection tactics, it’s important to know and understand your rights as a consumer. A description of your rights under The Fair Debt Collection Practices Act may be obtained directly from the FTC (http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm).
If you believe that a collector has violated your rights in their attempt to collect from you, then you should not hesitate to file formal complaints with the Attorney General for your state (www.naag.org) as well as the Federal Trade Commission. If enough complaints are received about a particular collector, then these authorities are empowered to bring an enforcement action against them, which may result in expensive fines that will make the agency or collector think twice about using such tactics in the future. You also have the right to bring a lawsuit yourself against a collector that harasses or abuses you, or otherwise violates your rights under the law.
One final point: The FDCPA technically only applies to third-party debt collectors, which includes commercial collection agencies and collection attorneys. It does not apply to the original creditor when collecting their own debt. For example, if you borrow money from a bank, the bank is not regulated by the FDCPA.
However, numerous other public laws protect consumers from deceptive or abusive collection practices even by original creditors, and many states also have laws that parallel the FDCPA but go further and include original creditors in the definition of a debt collector.
So if an original creditor is harassing you or has crossed the line, you should still file a complaint with your state’s Attorney General as well as the FTC. If a clear pattern of abuse emerges, the original creditor can be charged with unfair or deceptive acts or practices, either under state law or under the FTC Act that governs the conduct of commerce in our country.
To sum up, if you are on the receiving end of illegal collection tactics, action and/or harassment, don’t just take it. Educate yourself on your rights as a consumer, vigorously dispute debts that you don’t believe you owe and take action yourself in the form of complaints to your Attorney General and the Federal Trade Commission.