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LEGAL MATTERS: Debt Collection—What Are Your Rights?

Wednesday, July 04, 2012

 

You may not have paid your bills in full, but that does not mean you can be intimidated or abused by creditors. Learn how to protect yourself.

There’s an old joke – if you think no one cares if you are dead or alive, try missing a few payments on your bills.

Generally speaking, after about three to six months of non-payment, creditors will turn an unpaid bill over to a debt collector. These collectors are subject to the Fair Debt Collection Practices Act (FDCPA), a federal law that protects consumers from deceptive, unfair and abusive collection practices.

Unethical debt collectors

Each year, the Federal Trade Commission (FTC) receives hundreds of thousands of complaints from consumers regarding debt collectors. In its 2011 report to Congress, the FTC noted that 27% of all complaints received -- or 140,000 complaints – were related to debt collection practices. The vast majority of those complaints – 108,997 – involved parties collecting debts for others.

The FTC report notes that close to 50% of the complaints received involve collectors calling continuously or repeatedly. Close to 12% of the complaints contained allegations that the collectors were calling before 8 a.m., after 9 p.m. or other times that were inconvenient for the consumer. More than 15% of the complaints were from consumers who said they were contacted at work when the collector knew being contacted at work was a problem for the employee.

Some 16% of the complaints involved the collector using “obscene, profane or otherwise abusive language.” Close to 4% of the complaints involved collectors using violence or threatening to use violence.

Approximately 25% of the complaints alleged that the debt collector falsely threatened a lawsuit – an action they could not or did not intend to take. More than 18% alleged that the collectors threatened arrest or seizure of property.

What they may not do

In addition to the actions outlined last week and above, here are some of the other things debt collectors cannot do:

  • Falsely represent that they are an attorney;
  • Falsely represent that they represent the United States or any state;
  • Falsely represent the character, status or amount of the debt;
  • Falsely represent that non-payment can result in your arrest or imprisonment or the seizure of your property;
  • Distribute documents that look like they are issued by a court, official or agency of the United States;
  • Communicate or threaten to communicate false credit information;
  • Fail to communicate up front that they are a debt collector and they will use the information to collect the debt;
  • Use a postcard to collect a debt;
  • Threaten to take legal action if the collector has no intention of doing so;
  • Fail to verify the debt;
  • Fail to stop communication once told to do so by the debtor.

 

While the FTC is authorized to take action against debt collectors who violate the law, so, too can consumers. If you think a debt collector has violated any of the provisions of the FDCPA, you may want to contact an attorney. Under the law, debt collectors are liable for any actual damages caused by their failure to follow the FDCPA, punitive damages; a payment of up to $1,000.00 and costs and attorneys fees associated with bringing the action.

The foregoing is offered for informational purposes only and is not legal advice nor does it create an attorney-client relationship.

Susan G. Pegden is a litigation associate with the Law Firm of Hamel, Waxler, Allen & Collins in Providence.  She is admitted to practice in Rhode Island and Massachusetts and is a member of the Board of Governors of the Rhode Island Association of Justice (RIAJ) and a member of the Rhode Island Women’s Bar Association.

Sean P. Feeney is a partner with the Law Firm of Hamel, Waxler, Allen & Collins. He is admitted to practice in Rhode Island, Illinois and Wisconsin. Mr. Feeney is a former special counsel to the City of Providence, military prosecutor with the United States Marine Corps and Special Assistant United States Attorney for the Central District of California.

 

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