Debt Collection Abuse. Legal Constraints on Collection

Fair Debt Collection Practices Act

By Jerry Bunkers on Flickr

Debt piles up due to loss of employment, illness and other life events.  Outrageous interest rates, charges and fees are enough.  But, over aggressive bill collectors top it off.  Rude tactics at all hours violate the law.

Abusive Debt Collection

Federal law prohibits abusive debt collection.  This is conduct by debt collectors where they “harass, oppress, or abuse”.  Bill collectors may not call without identifying themselves.  They may not call before 9 am or after 8 pm. They may not call you at work.  Unless you give permission, these calls violate federal law.

The Fair Debt Collection Practices Act requires debt collectors to stop calling if you tell them you want no further contact.  If you notify the collector that you are represented by an attorney and give the lawyer’s name and address, the collector then violates federal law by ever contacting you and not the lawyer.  Of course, your attorney has a duty to reasonably communicate.

Within five days of a collection agency’s first communication with you, often an annoying telephone call, they must send you written notice.  The notice must include information including the amount owed, the name of the original creditor, and your right to dispute debt’s validity. If you do not dispute within 30 days, they’ll tell you they will consider it valid.  If you do dispute, they must send you verification.

Debt Collectors Fined for Violations

In a 1995 case, a collection lawyer violated these rules and was fined over $10,000 by the court. The bill collector made up some language while trying to settle a debt instead of following the simple language of the law.

The law requires notice on all collections that they are an attempt to collect a debt and that information obtained will be used for that purpose.  Use care in conversations with debt collectors.  If you get too chummy, you may admit to charges you don’t owe.  Never admit to a debt without first requesting verification.

Compare the source of the debt and all charges against your records. Bill collectors may not make up fees and charges. Any charges piled on top of the actual amount of your debt must be included in your agreement with the original creditor.  Collectors may not speak to third parties about your debt.  And, collections must cease while a debtor is on active military duty.

Bankruptcy Option

If debt seems insurmountable it may be advantageous to at least consider the bankruptcy option.  View the bankruptcy blog posts on this site for bankruptcy options.  Feel free to contact us for a consultation.

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About Andrew Myers

Attorney Myers is a member of the American Association For Justice, Massachusetts Academy of Trial Attorneys, New Hampshire Association For Justice, National Association of Consumer Bankruptcy Attorneys & Rotary International. Legal services provided in Massachusetts (MA) and New Hampsire (NH).

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