If you haven't paid your bills and are getting calls from bill collectors, you will probably hear them say some very scary things. Most people who work in debt collection try to stay within the rules set by the Federal Fair Debt Collection Practices Act (FDCPA), but many others regularly step over the line. In 2004, the Federal Trade Commission (www.ftc.gov) got more than 58,000 complaints about debt collectors. This is about 17% of all the complaints they got that year. The collection industry gets more complaints from customers than most other industries put together.
Professionals in debt collection would probably say that the high number of complaints is because the industry is so big and there is so much debt collection going on. But only a small number of violations are actually reported by consumers. This means that the data collected by the FTC only shows a tiny part of how big the problem really is. Even so, the FTC has found a pattern of abusive and illegal collection practises, and they are getting worse, not better.
Here are some threats that debt collectors often make:
"We'll take your house if you don't pay this bill right away." This threat is not real. The creditor can't take your house away from you unless the debt being collected is secured by the house (like a mortgage or home equity loan).
"We'll put out a warrant for your arrest if you don't pay this bill today." Nonsense. Failure to pay a debt is a civil matter, not a criminal matter. It is against the law to threaten a debtor with jail time or say they have done something wrong.
"We don't care that you sent us a notice to stop talking to us. We're still going to call you." The FDCPA gives you the right to stop a debt collector from contacting you. If you ignore a notice to stop talking to someone, you are breaking the law.
"Your wages will be taken from you to pay off this debt." A collector can only threaten to take legal action if it has the power to do so, and the vast majority of collection agencies have no legal power. A creditor can only take money from your paycheck if they have won a court case against you.
"We know where you live, so you'd better pay up." Yes, there are still threats of violence in this line of work. Last year, the threat of violence was given as the reason for nearly 300 complaints against collectors that the FTC got. This is totally against the law.
Collectors do more than just make fake threats. They also use other illegal methods. For example, it is against the law to talk to a third party about your debt. Still, debt collectors often call neighbours, relatives, and employers to find out more about people who owe money. As long as the debt collector doesn't talk about the debt itself, they are still on the right side of the line. But if they say or even imply that they are calling about a debt, they have gone too far.
Debt collectors often call them at work because many debtors have started to screen their calls at home to stop the constant stream (when they can obtain the number). In theory, a customer can tell the collector that they are not allowed to get personal phone calls at work, and the collector will stop calling. That lets the collector know that this kind of activity would get in the way of the consumer's job, which is not allowed. In reality, though, debt collectors often ignore this rule and still call people at work.
There are a lot of other ways to harass and scare people that cross the line from legal to illegal collection methods. The FDCPA says that it is against the law to use obscene or profane language, shout, make constant and annoying phone calls, not respond to written disputes, or publish information about a debtor.
So, what can you do to protect yourself if illegal actions are taken to get money from you? It's important to know and understand your rights as a consumer first and foremost. The FTC (http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm) is the best place to find out about your rights under the Fair Debt Collection Practices Act.
If you think a collector has broken your rights while trying to get money from you, you should not be afraid to file formal complaints with the Attorney General for your state (www.naag.org) and the Federal Trade Commission. If enough people complain about a collector, these authorities have the power to take legal action against them. This could lead to expensive fines that will make the agency or collector think twice about using these kinds of tactics in the future. You also have the right to sue a collector who bothers you, treats you badly, or does something else that goes against the law.
One final point. Technically, the FDCPA only applies to third-party debt collectors, such as collection agencies and lawyers who help them collect debts. It doesn't apply when the original creditor is trying to get their own money back. For example, the FDCPA does not apply to a bank when you borrow money from it. But many other public laws protect consumers from deceptive or abusive debt collection practises, even if they come from the original creditor. Many states also have laws that are similar to the FDCPA but go further and include original creditors in the definition of a debt collector. So, if an original creditor is bothering you or going too far, you should still file a complaint with both the FTC and your state's Attorney General. If there is a clear pattern of abuse, the original creditor can be charged with unfair or deceptive acts or practises under state law or the Federal Trade Commission Act, which governs how business is done in the United States.
To sum up, if a collection agency is bothering you, don't just take it. Learn about your rights as a consumer, fight hard against debts you don't think you owe, and take action by filing complaints with your Attorney General and the Federal Trade Commission. You can stop fake threats and illegal ways of getting money from you if you stand up for your rights.
