The definition of debt collection harassment is to intimidate, abuse, coerce, bully or browbeat consumers into paying off debt. This happens most often over the phone, but harassment could come in the form of emails, texts, direct mail or talking to friends or neighbors about your debt. Collection agencies are permitted to recover the money owed to creditors. They are not permitted to use deceptive or threatening techniques to do so.
The Consumer Financial Protection Bureau (CFPB) said it received more than 163,000 consumer complaints concerning debt collection in just two years. The Federal Trade Commission (FTC), which regulates the debt collection industry, said that no other industry receives more complaints. Collection agencies are most often chasing debt related to medical bills. The other major areas are credit card and student loan debt or auto loan and mortgage payments.
The Urban Institute estimates that roughly 77 million Americans, or 35% of adults with a credit file, have debt in collection. Not counting mortgage debt, adults owe an average of $5,178 for medical, credit cards, or utility bills that are past due. Their median debt (half owes more, half owe less) is $1,349.
A federal law — the Fair Debt Collection Practices Act (FDCPA) – outlines exactly what can and can’t happen in this business and most of the law is an effort to protect the consumers’ rights.
Summary of FDCPA
The FDCPA originally was passed in 1977 and amended in 1996 as a response to the alarming number of complaints about methods collection agencies were using to force people to pay their debts. Be advised that the FDCPA does not apply to the original creditor, only to debt collection agencies. The FDCPA says this about harassment: “A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.”
That seems plain enough, but the law gives more than 50 examples of what that means, including:
• Use of threat, violence or other criminal means to harm a person, reputation or property
• Use of obscene or profane language
• False representation that the debt collector represents a state or federal government
• Misleading information on the amount or legal status of a debt
• False implication that debt collector is an attorney or law enforcement officer
• Implication that nonpayment of a debt will result in arrest or imprisonment
• Causing a telephone to ring repeatedly with intent to annoy, abuse or harass
If any of these apply to your case, notify the collection agency with a certified letter that you feel you are being harassed. Send a copy of the letter to the original creditor, who could offer to cancel the debt or settle at an agreeable rate in order to avoid liability.
Steps To Stop Debt Collector Harassment
You might have a creditor who calls too often, uses profane or obscene language, threatens violence, sends harassing text messages, or more.
Fortunately, there are legal actions you can take to stop this harassment:
Write a Letter Requesting To Cease Communications
The first thing to do is to write the debt collector a letter telling them to stop calling you. You can use the sample letter language here. Under the FDCPA, they must follow your written request for no contact. If they do not, you can report them to the Federal Trade Commission (FTC). Keep in mind that the debt won’t just go away because of a letter. You must:
• Make payments on the debt
• Plan to dispute the debt
• File bankruptcy and get a debt discharge or repayment plan
• Deal with the debt collectors as they come
The longer you wait, the worse the debt situation may become for you. The debt collections must stop contacting you, but they can file a debt lawsuit against you or keep reporting your debt to credit agencies.
Document All Contact and Harassment
Be sure to document all illegal behavior. Any conduct prohibited by the FDCPA should be documented immediately. Keep a log of all of the debt collector’s harassment. You may even want to consider having another person present during debt collector phone calls or communications. Some people even record their conversations with the debt collector without telling the debt collector. This is illegal in some states, so be sure to check your own state’s laws.
File a Complaint With the FTC
If the debt collector continues to harass you, file a complaint with the Federal Trade Commission by reporting the company online. In your complaint, be sure to include:
• Collection agency’s name and address
• Name of the original creditor
• Dates and times of all communications
• Names of any witnesses
• Copies of any other material (written communications, tapes of conversations, your debt collector harassment log, etc.)
File a Complaint With Your State’s Agency
Sending a complaint to your state’s agency that deals with creditor harassment is a good idea. You should also send copies to the collection agency and the original creditor. In some cases, concerned for their own liability, the debt collector may offer to cancel the debt if you withdraw the complaint. This would be a great outcome for you because you could avoid the debt, the harassing communication would stop, and you could avoid potentially long proceedings by the Federal Trade Commission.
Consider Suing the Debt Collection Agency for Harassment
Another option is to sue the debt collector. Only consider this option if you have an extreme debt collector harassment case, not just because the debt collector is annoying. If you lose your case, the court could make you pay the debt collector’s court costs and attorney’s fees. The FDCPA is a “strict liability” law. This means that you do not have to prove any actual damages.
You have one year from the time the debt collector violated the law to sue for damages in state or federal court. You can be awarded up to $1,000 plus attorney’s fees just because the debt collector violated the law. Furthermore, if you can show actual damages, such as the cost of switching a phone number, you can recover those damages as well.
Remember, your debt will remain valid even though the collector violated the law. If the debt collector proves that the violation was unintentional and resulted from a “bona fide error,” despite the company’s procedure to avoid such errors, they could escape liability.
How To Stop Collection Phone Calls
Collection agencies are infamous for violating the rules against constant and aggressive phone calls. It is the one area that causes the most controversy in their business. It’s hard to avoid the first phone call from a collection agency, but once you’ve heard from them, there are steps you can take to stop the calls altogether. The first move is to wait for the collection agency to send a validation notice. They are required by law to send you a validation notice within five days. The notice must tell you how much money you owe, who the original creditor is and what to do if you don’t think you owe the money. After the first call, FDCPA rules permit debt collectors to make calls between the hours of 8 a.m. and 9 p.m., but with very severe restrictions meant to protect privacy. The collection agency must identify itself every time it calls. It may not call the consumer at work. It may only call the consumer’s family or friends to obtain accurate information about the consumer’s address, phone number and place of work. Most importantly, if a consumer does not wish to be called by a collection agency, he can either hire an attorney and refer all phone calls to the lawyer or submit a cease-and-desist letter, sent by certified mail, to the collection agency advising them that they may not contact you. When the collection agency receives the certified letter, it can’t contact you except for two reasons: First, to let you know it received the letter and won’t be contacting you again and second, to let you know it intends to take a specific action against you, such as filing a lawsuit. Sending a certified letter to the collection agency doesn’t mean you no longer owe the money, it simply means that the collection agency will have to take another route to get paid.
Debt Collectors Calling at Work?
Debt collectors can call you at work, but there are specific limitations on the information they can obtain and a simple way for consumers to stop the calls. If your employer does not allow you to receive personal calls at work, tell the debt collector that and he must stop calling you there.
When debt collectors call your employer, there are the limitations they must abide by:
• They can’t identify themselves as debt collectors or say that you owe a debt. If they do, they have violated your rights and you could contact an attorney to file a complaint.
• They may ask for your contact information, meaning your phone number and address and verification of employment. They can’t discuss the debt with your employers or co-workers.
• If the debt collector has won a court judgment against you that includes permission to garnish your wages, he may contact your employer. The employer can’t fire you for one wage garnishment, but could fire you for multiple garnishments.
• If the debt collector calls repeatedly at work to harass, annoy or abuse you or your co-workers, document the time and date and contact an attorney to discuss your rights.
It’s possible the debt collector called your office by mistake because he was given the wrong contact information. If this happens, inform him that you are not permitted to take calls at work and follow up with a certified letter to reinforce the point and he must stop calling. If they continue to call you at work, write down the time and date of the calls and present them to a lawyer, who could bring a suit against the collection agency and recover damages for harassment.
What If Harassment Goes On?
Hiring a lawyer or sending a certified letter to the collection agency should stop harassing phone calls, but there is plenty of evidence that it does not always work. One reason is that collection agencies can resume contacting you if you don’t respond to the validation notice they send after the first call. Consumers have 30 days after receiving the validation notice to tell the collection agency that they don’t owe the money or ask for verification of the debt. If a collection agency sends verification of the debt (e.g. a copy of the bill), it may resume calling you. By then, it’s time to notify the collection agency that you have a lawyer or send a cease-and-desist letter, but even then, the phone may keep ringing.
Dealing With Creditors Informally
You can stop debt collection harassment with the steps above or by filing for bankruptcy. Eventually, your debt must be handled, or it will never go away. Creditors would rather keep you as a paying customer, so they might offer you a loan “workout” or other alternatives. You have the option to deal with creditors informally to negotiate mutually beneficial terms.
Your options include:
• Repayment plans
• Credit counseling
• Loan workouts
• Other non-bankruptcy workouts
• Disputing billing charges
Local and State Laws Might Prohibit Creditor Calls at Work
Your local and state laws might also offer additional protection from workplace collection calls from both debt collectors and creditors. State law might also provide for greater damages than what is allowed by federal law. Check with your state attorney general’s consumer law department or a local attorney to find out what’s legal in your state. If you decide to take legal action, first file a complaint about the debt collector’s violations to the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB) and your local state attorney general’s office. Then you may choose to sue the collector. If you suffered damages such as lost wages, the goal of your lawsuit should be to collect damages. If you can’t prove any monetary damages, you still may be awarded up to $1,000 in a lawsuit.
Keep in mind that a collection agency also can sue you to recover the money you owe. Although the law regulates the behavior of debt collectors, it does not absolve you of paying your debts. Don’t ignore a lawsuit summons, or you will lose your opportunity to present your side in court. If you plan to sue for harassment, it is best to have a log that details your complaints with collection agencies and the times they violated the FDCPA. That means writing down the day, time and a summary of the exchange each time you are contacted by a collection agency. It would help if you recorded the phone calls, though laws in most states say you must advise a caller before recording them. It also is advisable to save any voicemail messages you receive from collection agencies as well as every piece of written correspondence. Let the collection agency know you intend to use the recordings in legal proceedings against them.
One way to avoid legal action is to send your complaint directly to the original creditor or debt collection agency and ask them to negotiate a settlement. In some cases, they may cancel the debt to avoid a court hearing. They also might offer to reduce the amount they will accept in order to settle. If so, make sure the offer is in writing and specifies the exact amount to be paid. Also, request that the settlement offer include a promise to remove the bill from your credit history so that it no longer has a negative impact on your credit score. Don’t ignore debt collectors, even if you believe the debt is not yours. The debt collector could sue you and win a judgment that will cost you more time and money.
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