Posts Categorized: Debt Harassment

Supreme Court tackles case about collection of old debt

Yesterday, the U.S. Supreme Court heard arguments in a Fair Debt Collection Practices Act case involving an old debt that was past the statute of limitations. It’s not often that the Supreme Court hears a FDCPA case, so I thought it would be worth digging into a bit. Plus, the issue involved in the case is one that affects consumers everywhere.

Case background

The consumer, Aleida Johnson, filed a Chapter 13 bankruptcy. In a Chapter 13, the person typically pays a portion of each of her debts and the remaining amount of the debts is wiped out. The amount of each debt that gets paid depends on the person’s income and assets. For a creditor to qualify to have some of its debt paid back, it has to file a “proof of claim” with the bankruptcy court. The proof of claim is just the basic information about the account, such as the amount, the date the account was opened, and so forth.

In Ms. Johnsons’s case, a debt buyer named Midland Funding filed a proof of claim with the bankruptcy court for a debt that was over ten years old.  The debt was so old that it was past the statute of limitations, which is the amount of time, by law, that a creditor has to start a lawsuit to collect an unpaid debt. In Ms. Johnson’s case, which arose in Alabama, the statute of limitations for suing on unpaid debts is six years. So there was no dispute that Midland could no longer bring a lawsuit to collect the old debt.

Many courts have ruled it is a violation of the FDCPA for a debt collector to file a lawsuit on an old debt that is past the statute of limitations. The related issue that the Supreme Court has to decide is whether it is a FDCPA violation for a debt collector to file a proof of claim in bankruptcy court on a debt that is past the statute of limitations. A decision in the case isn’t expected until June of 2017, but some of the Justices’ comments were revealing:

JUSTICE SOTOMAYOR: I’m having a great deal of difficulty with this business model…You buy old, old debts that you know for certainty are not within any statute of limitations…And apparently, you collect on millions of dollars of these debts. 

JUSTICE ALITO: If your description of Midland’s business model is correct, it doesn’t seem to me that it has much, if any, social utility.

The case, of course, will ultimately turn on the legal question involved, but these comments show that some of the Justices are skeptical of Midland’s business model.

What you need to know about the collection of old debt

If you’re facing debt collection on a debt that is more than a couple of years old, the first thing you should do is figure out how long the statute of limitations is. Remember, the statute of limitations is the amount of time set by law for a creditor to start a lawsuit against you. In Minnesota, for example, the statute of limitations for most debt collection lawsuits is six years. This means that the lawsuit only has to be started within six years. It doesn’t mean that the lawsuit has to be finished within six years.

Once you know what the statute of limitations is, you need to determine when it starts to run in your case. Generally, the statute of limitations begins to run on the first day that you are in default on your account. A quick way to figure out when your account went into default is to determine the date that you made your last regular payment. Although this won’t always be a precise date that the statute of limitations began to run, it’s a good estimate.

When you know the applicable statute of limitations and the date it started in your case, the rest is just simple math. Using Minnesota’s six-year statute of limitations as an example again, if you defaulted on your account on December 15, 2011, the creditor must start the lawsuit against you no later than December 15, 2017.

If the creditor doesn’t start the collection lawsuit within the statute of limitations, it loses its ability to use the judicial process to collect the debt. This doesn’t necessarily mean that the creditor can’t call or write you to collect the debt. In Minnesota, a debt collector may collect a debt that is past the statute of limitations. But it can’t threaten to sue you or sue you for an old debt that is past the statute of limitations. And if the debt is more than seven years old, it can’t be reported to the credit bureaus.

If the debt collector brings a lawsuit on a debt that is past the statute of limitations (or time-barred as some courts say), you have an absolute defense to the collection lawsuit. You need to raise this defense in your answer or it may be waived. Also, it’s your burden to prove that the statute of limitations is up and you may need to gather some evidence first. But this is a powerful defense that, if proven, will result in the debt collector’s case being thrown out.

In addition, many courts have held that a debt collector violates the FDCPA when it threatens to bring or brings a lawsuit for an old debt that is past the statute of limitations. When a debt collector violates the FDCPA, you have the right to sue them and the law provides that the collector has to pay you up to $1,000, plus any provable actual damages–such as emotional distress. Further, the debt collector has to pay your attorney fees and costs. So if everything goes your way, you could get the debt wiped out and get some money back from the debt collector.

A quick summary of the law on the collection of old debt

(1) In Minnesota, a debt collector can attempt to collect a debt past the statute of limitations through phone calls, letters, or similar methods. This rule may be different in other states.

(2) A debt collector in Minnesota cannot, however, threaten to sue you or sue you for a debt that is past the statute of limitations. This is also true in most other states.

(3) A debt collector cannot put a debt that is more than seven years old on your credit report. This is true everywhere. I would also take the position that a debt collector cannot even threaten to report a debt that is past the statute of limitations.

(4) Until the Supreme Court decides the Midland Funding case, it is unclear whether a debt collector can file a proof of claim in a Chapter 13 bankruptcy and receive payment through the bankruptcy process. But we should definitively know the answer to this question in the next six months or so.

 

 

CFPB issues report on consumers’ experiences with debt collectors

Last week, the Consumer Financial Protection Bureau issued a report titled “Consumer Experiences with Debt Collection.” The report was based on survey data collected between December 2014 and March 2015 from consumers who were contacted by debt collectors. The Bureau touts the survey as providing a more comprehensive picture of consumers’ experiences with debt collection than has been available from other debt sources.

Here are some of the findings I thought were noteworthy:

Nearly one-third of all consumers have been contacted by a debt collector. 32 percent all consumers reported being contacted by a debt collector about a debt within the past year. About 75 percent of these consumers were contacted about more than one debt.

Low income and non-white consumers are more likely to experience debt collection efforts. Over half of consumers with annual household income of less than $20,000 reported being contacted about a debt in collection, compared with only 16 percent for those with household incomes of $70,00 or more. Similarly, more than 40 percent of non-white consumers reported having been contacted by a debt collector, compared with 29 percent of white consumers.

Credit cards, student loans, and medical bills were the most common types of debt. The survey separates the types of debts into two categories: “loans” such as student loans, auto loans, and credit cards; and “past-due bills” such as medical bills and utility bills. Among consumer contacted about “loans,” 44 percent were contacted about a credit card and 28 percent were contacted about a student loan. On the “past-due bills” side, nearly 60 percent of people were contacted about a medical bill.

One in seven people in collections were sued to collect the debt. 15 percent of consumers with a debt collection experience reported that they were sued by a creditor or debt collector during the preceding year. Only about one-quarter of these people reported attending a court proceeding.

Over one-third of people contacted by collectors were contacted four or more times per week. 37 percent of people who were contacted by a debt collector reported that they were contacted four or more times a week. 17 percent reported that they were contacted eight or more times week.

Debt collectors honored a request to stop contact only 25 percent of the time. 42 percent of consumers who were contacted by a debt collector requested that the collector stop contacting them. However, the collector stopped the contacts in only 25 percent of those cases.

Nearly 30 percent of consumers reported being contacted about a debt they didn’t owe. According to the survey, 28 percent of consumers who had been contacted by a debt collector reported that at least one debt was being collected that the consumer believed wasn’t owed. One-third of consumers who had been contacted said the collector was trying to collect the wrong amount.

I talk to people in debt collection nearly every day and these findings are consistent with my conversations and anecdotal observations. I strongly believe that when dealing with debt collectors, knowledge is power. Take some time to learn about the collection process and your rights. Here’s some suggestions to get you started in learning more:

(1) educate yourself about your rights under the Fair Debt Collection Practices Act, which governs what debt collectors can and can’t do. If you feel like a debt collector has broken the law, consider filing a complaint with the CFPB or talking to an attorney about suing the collector under the FDCPA.

(2) if you just want to pay the debt, learn how to best negotiate a settlement with a collector.

(3) if you’re handed a collection lawsuit, always answer it by the appropriate deadline to avoid a default judgment.

(4) after answering the collection lawsuit, learn the typical next steps and how to approach them.

(5) if a collection judgment gets entered against you, know what your options are to minimize the damage.

(6) if you’re being garnished by a collector, learn more about the process and your rights.

 

 

Collectors are liable for emotional distress caused by illegal collection tactics

The Fair Debt Collection Practices Act prohibits debt collectors from using false, misleading, abusive, and harassing tactics to collect debts. Under the FDCPA, any person who has been subjected to illegal debt collection practices may sue the debt collector to hold it accountable and enforce the law. If successful, the plaintiff is entitled to $1,000 in statutory damages and the collector must pay her reasonable attorney fees and costs.

More importantly, the collector may also be responsible for compensating the person for any emotional distress that she has suffered from the illegal collection tactics. Commons symptoms of emotional distress caused by illegal collection practices include:

*Crying
*Loss of sleep
*Loss of appetite
*Headaches, vomiting, or stomach pain
*Martial problems
*Problems concentrating at work

While many debt collectors profess cold-hearted skepticism that a person could be so upset by collection efforts, I’ve worked with many clients who suffered from emotional distress symptoms. I had one client who spent many sleepless nights crying in her bedroom because a collector was pursuing her for a debt she already paid. Another client suffered from severe anxiety, nausea, and headaches because a collector pursued her for a debt she didn’t owe. So I know for a fact that  illegal debt collection practices cause emotional distress.

The law says that a collector has to pay for the emotional damage their harassing or abusive collection tactics caused. While medical evidence is usually helpful in proving the extent and cause of the emotional distress, most courts don’t require it. In most cases, it is sufficient for the person to testify in detail about their emotional distress symptoms. Often, a witness, such as a spouse, co-worker, or friend has seen the symptoms and can corroborate the plaintiff’s testimony.

Depending on the severity and duration of the emotional distress, the amount of damages awarded can be significant.

For example, in Fausto v. Credigy, the collector made repeated calls and false threats of credit reporting over a Wells Fargo account. The Faustos believed that they had already paid off the account and told the collectors to stop calling. The collector continued to call–over 90 times in total. At trial the Faustos testified that they had many sleepless nights, an inability to eat, and the stress caused problems within their family. Ultimately, a Northern California jury awarded the Faustos $100,000 for emotional distress caused by the collector’s harassment.

In another case, McCollough v. Johnson, Rodenburg & Lauinger, a collection law firm filed a lawsuit that was barred by the statute of limitations. The law firm, JRL, had information from its client that the suit was time-barred, but continued to prosecute it for 8 months. At trial, McCollough testified that JRL’s wrongful lawsuit caused him anxiety, pain, increased temper, and conflict with his wife. Although McCollough already suffered from a disabling pre-existing condition due a traumatic brain injury, he characterized JRL’s suit as the straw that broke the camel’s back. A Montana jury awarded McCollough $250,000 for the emotional distress caused by JRL.

In another case, Yazzie v. Law Offices of Farrell & Seldin, a collection law firm tried to garnish the wages of Lucinda Yazzie, despite repeated notice that the debt was actually owed by someone else with the same name but with a different social security number. The law firm had changed the social security number in its files from the SSN of the correct account holder, to Ms. Yazzie’s. Farrell & Seldin’s collection attempts continued for three years. The New Mexico jury awarded Ms. Yazzie $161,000 for her emotional distress suffered during the three years of being wrongfully pursued for a debt that wasn’t hers.

Similarly, in Mejia v. Portfolio Recovery Associates, a debt buyer sued the wrong person for a $1,000 credit card account. Ms. Mejia repeatedly told them it wasn’t her debt, but the debt buyer persisted with the lawsuit. Ms. Mejia testified that the lawsuit terrified her and that she feared she would lose her house or be arrested. A Missouri jury awarded Ms. Mejia $250,000 for emotional distress.

Of course, these cases all involved particularly egregious collection conduct and severe emotional distress. Obviously, not every case results in these kind of damages.

But if you’ve endured illegal collection practices that caused you stress, anxiety, fear, or other symptoms of emotional distress, the law may require the collector to be accountable for your suffering.

 

How to stop collection calls to your cell phone

Few things are more annoying than repeated debt collection calls to your cell phone. Often, these calls are made by an automatic dialer. It’s not unheard of for people to get 10 or more of these robocalls per day. This is incredibly frustrating if you rely on your cell phone for work or to keep tabs on your children. The good news is that there are a couple ways to stop these annoying robocalls.

Verbally tell the collector to stop the robocalls

collection calls to your cell phoneYou should first figure out if the collection calls to your cell phone are being made by an autodialer. You can usually spot a robocall if there is a pause or click before a person comes on the line. An automated message is also a clear sign of an autodialed call. If the collection calls are robocalls, there is a powerful federal law called the Telephone Consumer Protection Act that protects you. The TCPA forbids anyone from using an autodialer to call your cell phone without your consent. In most debt collection situations, consent is given in the fine print of the terms and conditions of the credit agreement. Most credit agreements have language buried in them that gives the creditor your consent to robocall your cell phone. This consent is then passed on to the debt collector if you fall behind on your payments.

Fortunately, the TCPA gives you the right to revoke your consent to autodialed calls at any time and in any reasonable way. This includes revoking your consent verbally over the phone. All you have to do is tell the collection representative that you are revoking your consent to robocall your cell phone. Under the TCPA, they have to stop the autodialed calls immediately.

Write a letter demanding that the collection calls to your cell phone stop

Even though you can make the autodialed calls stop by verbally revoking your consent, there are two drawbacks to that approach. First, it can be difficult to prove a verbal statement. Second, the TCPA only allows you to revoke your consent to autodialed calls. The collector is free to continue calling your cell phone as long as they manually dial the calls.

Thankfully, there is another federal law that regulates debt collection calls: the Fair Debt Collection Practices Act. Under the FDCPA, you have the right to stop all calls from a debt collector by writing the collector and requesting that they stop calling you. This letter doesn’t have to be fancy. Just make sure to include your full name and your account number if you have it so that the collector can properly identify your file. All the letter has to say is that you want the collection calls to stop. You should list the all of the phone numbers that you no longer wish to receive calls on. If you want to continue to get collection calls on a certain phone number, you should say so. If you want to only get calls at a certain time, you should say that too. Under the FDCPA, the debt collector has to comply with these requests or face possible legal action.

In some cases, you can sue the collector to make the robocalls stop

Although not all collection calls to your cell phone are against the law, some of them are. And the penalties for illegal autodialed calls are significant. Under the TCPA, the collector must pay you between $500 and $1,500 per call for each offending robocall. The court will also issue an injunction against the collector forbidding further autodialer calls. Here’s how you know if debt collection robocalls are illegal:

(1) The collection calls were made with an autodialer

Under the TCPA, an autodialer is anything that “has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.” The Federal Communications Commission has made it clear that this definition is very broad and covers most, if not all, of the popular dialing software used by debt collectors.

As technology advances, though, this issue is becoming more complex. Some courts have said that even if an autodialer is involved, if it requires some human intervention to make the call, then the calls aren’t barred by the TCPA. It’s no surprise, therefore, that debt collection industry vendors are currently designing software that requires some human intervention in an effort to evade the TCPA. The FCC, however, has signaled that it doesn’t approve of these efforts to exploit the spirit of the law, so future rule making may be coming.

(2) The robocalls were made to your cell phone

The TCPA only prohibits robocalls to wireless phones. Most autodialed debt collection calls to a landline are permitted.

(3) You’ve revoked your consent OR you never consented in the first place

Robocalls to your cell phone are only illegal if you didn’t consent to them. As noted above, in the context of debt collection consent is typically given in the credit agreement. That consent, however, can be revoked verbally or in writing. Once you’ve revoked your consent, all future robocalls to your cell phone violate the TCPA and you’re entitled to $500 to $1,500 for each illegal call.

It’s also possible that you’ve never given consent for the collection calls to your cell phone. This most often happens when the collector is trying to reach the previous owner of your cell phone number. Because you never consented to any of these wrong-number calls, you can enforce your rights under the TCPA without first revoking your consent.

Debt collectors cannot lie to you

The Fair Debt Collection Practices Act forbids a debt collector from making any false or misleading statements when they are attempting to collect a debt. If a debt collector lied to you, here’s what you need to know about your rights under the FDCPA.

debt collector lied

The FDCPA applies to “debt collectors” collecting “consumer debts”

The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if the false statement was made by a bank or credit card company that is collecting its own debts, the FDCPA doesn’t apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.

In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn’t apply.

Common debt collection lies

Although the FDCPA is clear that virtually any false statement is a violation, there are some collection lies and misleading statements that seem to happen frequently. These include:

*Telling you that you owe a debt that you already paid or that was discharged in bankruptcy

*Threatening to sue or garnish you after the statute of limitations has expired;

*Incorrectly reporting information on your credit report;

*Mis-stating your rights in student loan collections;

*Claiming that you personally owe a debt you have no obligation to pay, such as a debt for an ex-spouse or a deceased relative;

*Incorrectly stating the balance of your account (possibly because of unauthorized fees or uncredited payments);

*Suggesting that they are affiliated with an attorney when they are not;

The false statement probably has to be “material”

Although the FDCPA doesn’t say anything about it, many courts have adopted a rule that the false statement has to be “material.” This generally means that it’s not enough to show merely that the debt collector lied to you. You must also show that they lie impacted your ability to evaluate your options in some way. In my opinion, any statement about the balance of the account, the legal status of the account, your legal rights, or the collector’s legal remedies should be considered material.

If a debt collector lied to you, hold them accountable under the FDCPA

The FDCPA gives consumers the power to sue a debt collector that violates the law. It’s a great way to stop collection harassment cold and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:

* Up to $1,000 in statutory damages (even if you’ve suffered no monetary loss);

* Provable actual damages (including for emotional distress);

* Your attorney fees and court costs must be paid by the collector

Most consumer lawyers, including me, handle FDCPA lawsuits on a contingency fee. This means that you don’t pay us any fees unless I recover money for you and those fees come from the collector’s pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

(photo: Joe Penniston)

Can a debt collector call me at work?

The Fair Debt Collection Practices Act strictly regulates collection calls while a person is at work. The Act recognizes that you have a right to keep your personal financial information private and that it’s difficult to maintain that privacy while you’re at the office. If you’re getting collection calls at work, here’s what you need to know.

The FDCPA only applies to “debt collectors” collecting “consumer debts”

The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if the calls are from a bank or credit card company that is collecting its own debts, the FDCPA doesn’t apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.

In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn’t apply.
collection calls at work

Collection calls at work are illegal if the collector knows that your employer prohibits them

The FDCPA doesn’t expressly forbid a debt collector from calling you while you’re at work. But if the collector knows that your employer doesn’t allow you to take calls on the job, then the FDCPA prohibits further calls. For example, let’s say that you’re a nurse and you’re not allowed to make personal calls during your shifts. Knowing this, you tell a collector not to call you at work. Once you’ve told the collector this, any further collection calls while you’re at work probably violate the FDCPA. There’s no special language that you have to use to notify the collector that your employer forbids calls. It’s enough to tell the collector that you can’t talk while you’re at work.

Depending on your job, you may not even be required to tell the collector that you can’t take collection calls at work. For example, some jobs–such as manufacturing, health care, and teaching–so obviously don’t allow the employee to take personal calls at work that a debt collector should know that calls are prohibited without being told.

Collection calls to someone else at your work are almost always illegal

Although the FDCPA doesn’t prohibit all collection calls to you while you’re at work, it does prohibit most calls to someone else at your employer. So most collection calls to your co-workers are illegal, especially if the collector discusses your debt with the co-worker. There is an exception if the debt collector is calling a your employer to enforce a court judgment. For example, a collector may call your human resources department to discuss a pending wage garnishment against you.

How to use the FDCPA to stop illegal collection calls to your workplace

The FDCPA gives you the power to sue a debt collector that violates the law. It’s a great way to stop illegal collection calls to your work and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:

* Up to $1,000 in statutory damages (even if you’ve suffered no monetary loss);

* Provable actual damages (including for emotional distress);

* Your attorney fees and court costs must be paid by the collector

Most consumer lawyers, including me, handle FDCPA lawsuits on a contingency fee. This means that you don’t pay us any fees unless I recover money for you and those fees come from the collector’s pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

If you’re dealing with debt collectors, make sure to download and use our free debt collection call log so that you can document all of the debt collectors’ communications. And if the debt collector does anything that you think was unfair; untrue; or harassing, oppressive, or abusive, please contact us to discuss the situation further. We offer a free case review for all FDCPA cases and if we agree to handle your case, you won’t have to pay us any money up front. Our fees come from the money we recover for you if you win your case or accept a negotiated settlement.

(phote: Apreche)

Can a debt collector call my friends and family about my debt?


collection calls to friends and familyThe Fair Debt Collection Practices Act generally forbids collection calls to friends and family. In fact, collection calls to most third-parties are illegal. There are some exceptions to this general rule, though. Here’s what you need to know if a debt collector is talking to someone else about your debt.

The FDCPA only applies to “debt collectors” collecting “consumer debts”

The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if the calls are from a bank or credit card company that is collecting its own debts, the FDCPA doesn’t apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.

In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn’t apply.

The FDCPA generally prohibits a debt collector from “communicating” with a third party

Under the FDCPA, a debt collector “may not communicate, in connection with the collection of any debt, with any person other than the consumer…” Although this language seems straightforward, it’s important to understand what it means to “communicate” under the FDCPA. The Act defines “communication” as the conveying of information about a debt. So a missed call to your boyfriend, without a voicemail, is probably not a communication. But if the collector leaves your boyfriend a message or actually talks to him, it’s likely to be considered a communication for the purpose of the FDCPA.

Communications with certain third parties are allowed

There are a couple of exceptions to the general prohibition against collection calls to friends and family. For example, the FDCPA allows a debt collector to communicate with a couple of different people without violating the law. These people include:

*your attorney

*the debt collector’s attorney

*the creditor (ie. the debt collector’s client)

*the creditor’s attorney

*a credit reporting agency, if otherwise allowed by law (ie. Equifax, Experian, TransUnion, etc);

A collector may also communicate with your employer if it’s reasonably necessary to enforce a court judgment. For example, the FDCPA allows a debt collector to call your employer and confirm that you work their so that they can garnish your wages.

A collector may also communicate with a third-party to learn your contact information

Another exception to the general rule against third-party communications is the “location information” exception. The FDCPA allows debt collectors to place collection calls to friends and family to learn your location information. Location information is your address and phone number. But this call is strictly regulated:

*the collector must identify himself and tell your friend that he is confirming your location information;

*the collector can’t identify his employer unless your friend asks;

*the collector can’t tell your friend that you owe a debt or discuss the details of the debt;

*in most cases, the collector can’t ask your friend to have you call the collector back;

*in most cases, the collector only gets to make this “location information” call one time

It also follows that if the collector already knows your address and phone number, then it can’t call a third-party for your location information.

If collection calls to friends and family are illegal, why do collectors do it?

Although it violates the FDCPA, many debt collectors use this tactic because it’s profitable. If you’re like most people, you’re understandably embarrassed by not being able to make ends meet. It’s stressful enough to suffer this embarrassment privately. But when a debt collector tells your friend or family member that you aren’t paying your bills, your private embarrassment quickly turns into semi-public humiliation. Debt collectors know this and use the third-party calls to put pressure on you to make a payment. Debt collectors also know that most consumers don’t know about their rights under the FDCPA, so there is little chance that the consumer will do anything about the illegal third party calls. Rather than paying the debt collector to make the third party calls stop, it may be best to discuss your situation with a consumer lawyer. Paying the shady debt collector will only encourage him to keep breaking the law. But a consumer lawyer can help you hold the debt collector accountable by bringing a FDCPA lawsuit on your behalf. After being sued for violating the FDCPA, most debt collectors will think twice about violating it again.

If you’re dealing with debt collectors, make sure to download and use our free debt collection call log so that you can document all of the debt collectors’ communications. And if the debt collector does anything that you think was unfair; untrue; or harassing, oppressive, or abusive, please contact us to discuss the situation further. We offer a free case review for all FDCPA cases and if we agree to handle your case, you won’t have to pay us any money up front. Our fees come from the money we recover for you if you win your case or accept a negotiated settlement.

(photo: http://www.flickr.com/photos/12567713@N00/463392640/)

Stop collection harassment with the FDCPA

stop collection harassmentThe best way to stop collection harassment is to know and enforce your rights under the Fair Debt Collection Practices Act. The FDCPA is a powerful federal law that regulates what debt collectors can and can’t do when collecting debts. In passing the FDCPA, Congress recognized the negative impact that abusive debt collection has on people and provided powerful remedies against collectors who break the law. Here’s what you need to know about how the FDCPA protects you from debt collection harassment:

The FDCPA applies to “debt collectors” collecting “consumer debts”

The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if you are getting collection calls from a bank or credit card company that is collecting its own debts, the FDCPA doesn’t apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.

In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn’t apply.

The FDCPA protects you even if you owe the debt

It doesn’t matter if you owe the debt, the collector still must follow the FDCPA. The law recognizes that you shouldn’t be subjected to collection harassment and abuse just because you owe someone money. The FDCPA also protects people who are being wrongfully pursued for debts that they don’t owe.

Any conduct that is unfair, untrue, or harassing is prohibited

In general, any collection conduct that is harassing or abusive, false or misleading, or unfair is a violation of the FDCPA. This is extremely broad and potentially covers a wide range of collection tactics. The FDCPA itself and various court decisions have established that the following specific conduct is illegal:

* Collecting a debt that you don’t owe;

* Communicating with other people about your debt;

* Calling you at work after you’ve told the collector not to;

* Telling you something that is false or misleading (often a problem in student loan collections);

* Harassing you, insulting you, or using racial slurs;

* Not telling you that they are a debt collector;

* Robocalling your cell phone without your consent

This isn’t an exhaustive list. If you think a collector’s conduct might be illegal, you should talk to a consumer lawyer to determine whether the FDCPA has been violated.

How to use the FDCPA to stop collection harassment

The FDCPA gives consumers the power to sue a debt collector that violates the law. It’s a great way to stop collection harassment cold and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:

* Up to $1,000 in statutory damages (even if you’ve suffered no monetary loss);

* Provable actual damages (including for emotional distress);

* Your attorney fees and court costs must be paid by the collector

Most consumer lawyers, including me, handle FDCPA lawsuits on a contingency fee. This means that you don’t pay us any fees unless I recover money for you and those fees come from the collector’s pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

 

Stop collection calls for someone else’s debt

Photo by Chris Potter

Photo by Chris Potter

On of the most frequent consumer complaints received by the Consumer Financial Protection Bureau are annoying collection calls for someone else. It’s unclear whether these collectors are intentionally pursuing the wrong person or that they’ve made a mistake. But if you’re getting calls or letters from a collector for someone else’s debt, you probably don’t care why it’s happening, you just want the collection attempts to stop. Here are some suggestions to stop collection calls for someone else.

Collection calls for someone else

If a debt collector is calling or writing you about a debt that you don’t owe, the first thing you should do is tell them very clearly that they have the wrong person and that this is someone else’s debt. Be polite but firm. The collector may ask you to confirm the last four digits of your social security number or a similar personal identifier. While it may be unwise to give the collector your full social security number, there probably isn’t too much risk in giving them  the last four digits to confirm that the debt isn’t yours. The collector may ask you if you know the actual account-holder and how to reach them. While you’re under no obligation to do so, you may consider passing along the other person’s information if you know it.

In addition to verbally telling the collector that it is someone else’s debt, you may consider sending a follow-up letter confirming what you told them. Identify yourself in the letter and then write something like: “you called me on this date at this number. I am not the person who owes this debt. Please stop contacting me.” If you know any details about the account in question, include a reference to those in your letter to be sure the collector can properly identify the account. Send this letter certified mail with a return receipt and keep a copy of the letter and receipt for your records.

You should also keep detailed records of any additional collection attempts after you’ve notified the collector that the debt isn’t yours. Keep track of the time, dates, and duration of any additional calls and save any voice messages. If you think the calls are robocalls, make a note of that and why you think so. Also, keep copies of any letters or other documents that they send you.

It’s also a good idea to check your credit reports to make sure the other person’s debt isn’t listed on your reports. Use Annual Credit Report to get free copies of your credit reports from the three major credit reporting agencies. Once you have the reports, make sure that the other person’s account isn’t showing up on your credit report. If it is, you should send a dispute letter to each of the credit bureaus incorrectly reporting that account. Take a look at this post for more information about how to dispute incorrect information on your credit report.

If you’ve told the debt collector that you are not the right person and continue to get collection calls for someone else, it’s time to talk to a consumer rights attorney to discuss the situation in more detail. In addition to helping you stop the collection attempts, a consumer attorney can advise you whether you have any claims under the Fair Debt Collection Practices Act against the debt collector. If the debt doesn’t belong to you, you’ve told the collector that, and the collector still keeps calling, it deserves to get sued under the FDCPA and be held accountable for harassing an innocent consumer.

Collection lawsuit for a debt that isn’t yours

If you get served with a collection lawsuit for someone else’s debt, you need to take additional steps. You should do everything suggested above, but you also have to submit an answer to the lawsuit. In Minnesota, the answer must be submitted within 20 days. An answer is a formal legal document that responds to each of the allegations in the complaint. If the debt isn’t yours, you should be able to deny most of the allegations in the lawsuit. You should also note somewhere in your answer that the debt is someone else’s. Even if you don’t owe the debt, you have to answer the lawsuit. Failure to respond to the lawsuit will likely result in a default judgment against you. A default judgment can be difficult (and expensive) to overturn, even if the debt isn’t yours. It may also lead to garnishments and other unpleasantness.

Because the consequences of a collection lawsuit are quite serious, you should strongly consider discussing your situation with a consumer lawyer. A consumer lawyer can help you prepare an answer to the lawsuit and also advise you if you have possible counterclaims against the debt collector for pursuing the wrong person.

 

 

Use the TCPA to stop wrong number robocalls

Unwanted robocalls and texts are one of the most frequent consumer complaints received by the Federal Communications Commission. In 2014 alone, the FCC received about 215,000 complaints about autodialer calls and texts. These calls are particularly annoying when the caller is trying to reach someone else. Often, these wrong number robocalls are from debt collectors trying to collect a debt from the previous user of a phone number or from telemarketers pushing their products.

In response to the overwhelming number of consumer complaints, the FCC recently strengthened consumer protections against wrong number robocalls by clarifying the Telephone Consumer Protection Act. The TCPA is a federal law that prohibits auto-dialed calls to your cellular phone without your consent. Until recently, however, there was a loophole of sorts for wrong number robocalls. Callers could argue that they had the consent of the person they were trying to reach and that was good enough to satisfy the TCPA’s consent requirement.

Thankfully, the FCC closed this loophole. The FCC has made clear that callers are liable for robocalls to reassigned numbers when the current subscriber of the number has not consented, even if the caller has no notice of the reassignment. This reaffirms the TCPA’s basic premise of giving consumers control over the calls that they receive.

Under the TCPA, you can obtain an order from a court that requires the caller to stop placing wrong number robocalls to your cell phone. In addition, the TCPA provides for damages of at least $500 per illegal robocall. This $500/call penalty is designed to deter illegal robocalls and to incentivize consumers to help the FCC enforce the TCPA through private lawsuits.