How to Know if a Debt Collector is Breaking the Law

Debt collection means big business for several companies, although their practices are sometimes far less orthodox than you would expect from a respectable organization.

Debt collector’s business model

First of all, let’s understand the business model. Assume you have a debt to a cable company. Since you haven’t paid in the last six months and you are not likely to do so in the future, the cable company sells your debt to a professional collector for a fraction of the price.

Why is the cable company ready to give up some money? Because 20% of the original debt today is more than they can hope from to get back from you.

The company which purchased the debt, like CCS Collections has paid for it and now, not only do they want their investment back, but they want as much as possible, penalties included. This is the moment when they start to call you, to e-mail you, to contact even your friends and family.

Sounds like harassment? Sometimes it is, and there are laws and ways to protect you against this. Read further to learn about what you can do yourself and when it is time to ask for professional help from a lawyer.

Fair Debt Collection Practices Act (FDCPA)

Even the government took notice of some of the unlawful practices of some debt collection companies so much that it has created an Act to protect the population. The FDCPA highlight some of the actions which should not be tolerated by a person, even if they own money. These unethical practices include:

• Phone calls- the reasonable hours are 8.00 AM to 9.00 PM or a schedule provided by the customer if they have a different work schedule.
• Ceasing communication upon request- If you notify the debt collection company in writing that you demand them to stop communication, they should comply immediately. After this, they can only contact you if they open a lawsuit against you, which they usually don’t, because most of the times the amount does not justify the trouble.
• Contacting the consumer directly if they have been informed that the person has chosen to be represented by a third party, like a lawyer.
• Threatening to take legal action against the consumer to intimidate them. If the debt company wants to open a lawsuit, they should pursue their goal, without using this as a threat.
• Making public the data of the consumer- Violating the right to privacy and putting the personal data on bad creditors’ list is a major overstepping of personal freedom.
• Abusive language or actions- Debt collection agencies can use intimidation techniques worthy of gangster bands. This includes profane words, repeated calling, annoying the customer or threatening them. Contacting third persons, other than the person’s spouse or lawyer is only permitted to obtain information about the customer’s whereabouts and nothing more.
• Asking for far more money than the original debt. The collector can only claim the amount of the original debt and penalties they bought; they can’t incur their penalties on top of that. However, they can add a capped interest rate.
• Deceiving the customer- In the debt collector is stating to be a member of any other organization than the one he or she represents, like a police agent or attorney, this is impersonating and is punishable by law.

What can you do?

There are some legal action courses of action you can take if you have been the victim of any of the above-mentioned unfair practices by a debt collector.

Sue the debt collector in State Court

Although the lengthiest and costliest option, if you win, you can get up to $1,000 in statutory damages and additional coverage of the lawyer’s fees and other costs. This is the most you will get out of these types of lawsuits, and you need to have hard proof that a violation of the FDCPA occurred and affected you directly.

Sue, the debt collector in Small Claims Court

The advantage of this option is that you can represent yourself and you don’t need to hire an attorney. You file the documents and get a hearing in less than two months, sometimes the judge deciding on the spot. In this case, you can’t hope to get much damage back, but you can get rid of the pressure.

Report the debt collector to authorities

The first option is to go to the Federal Trade Commission if you feel that any of the points laid out in the FDCPA has been violated. Another option if you want to settle is to contact the Consumer Financial Protection Bureau. As a last resort, if you feel that the collector is violating state laws and you feel threatened and harassed you can contact the State Attorney General.