Debt collectors must comply with federal and state laws when they contact you. They simply cannot do and say anything that they want. When they act illegally, you can sue the debt collector for financial compensation.
First, you must know your legal rights and what debt collectors are not allowed to do when speaking with you. If a debt collector harassed or abused you, contact an experienced debt collector harassment attorney to take legal action.
Debt collectors do not have authority over you, nor do they receive a blank check because you owe them money. They abused the leeway that the law gave them in the past, so Congress took action to rein in their practices. Now, you have rights, and an attorney can stand up for them.
If you suspect a company used unlawful debt collection practices against you, never hesitate to exercise your rights under consumer protection laws. These laws are in place for a reason – to provide legal relief and hold debt collectors accountable for unacceptable practices.
Seek a free consultation with a consumer protection law firm near you as soon as possible. There is no risk in having a lawyer evaluate your legal options.
Why Congress Passed a Law Protecting Debtors
In 1977, Congress passed, and President Carter signed the Fair Debt Collection Practices Act into law. In its findings that preceded the text of the law, Congress stated that:
“There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, marital instability, the loss of jobs, and invasions of individual privacy.”
The law’s passage came after many hearings in which individual debtors testified about the awful conduct they experienced from collection companies.
Accordingly, Congress placed many limitations on what debt collectors may do while collecting debt. Congress did not abolish the entire debt collection industry. Creditors still have the right to collect debts that consumers owe. If creditors cannot do anything to collect, it will put a large freeze on lending money. Then, the economy as a whole can suffer severe damage. However, Congress sought to balance debt collectors’ legitimate interests with consumer protection.
Debt Collectors Make a Lot of Money When You Pay Your Debt
The problem is that an entire industry has sprung up to make money from your debts. The company that has lent you the money may not have the time or the means to take action to collect the debt. Debt collectors will buy your debt from the original creditor for a fraction of the overall amount. This fraction can be as low as pennies on the dollar. You then must pay the debt collector who has purchased the debt, as they become your creditor.
Debt collection can be a very lucrative industry. If the debt collectors are successful, they can earn significant returns when you repay your debt. If one debtor pays them in full, it can cover the costs for several other debtors from whom they cannot recover.
Thus, the debt collector has an incentive to pressure everyone in any way possible. They aim to get you to pay without taking you to court because they spend less on expenses and efforts to collect a judgment.
The FDCPA Is Intended to Eliminate Harassment, Abuse, and Deception
The FDCPA recognized that many debt collectors took things too far. They used various practices bordering on harassment and intimidation (and often crossed the line). Debtors suffered emotional distress and other adverse and stressful effects on their lives. They suffered damage to their reputations and had to deal with repeated calls and threats. Congress intended to stop harmful practices without preventing debt collectors from doing their jobs.
The FDCPA deals with how debt collectors can communicate with you and what they may or may not say when trying to collect. There is now a list of illegal practices in connection with debt collection.
If the debt collector violates these laws, you can subject them to:
- Enforcement action by the Federal Trade Commission (the agency that has jurisdiction over debt collection practices)
- A lawsuit filed under the FDCPA
- A lawsuit filed under the terms of a state consumer protection law
The Debt Collector May Call You Too Often or at the Wrong Times
One primary illegal debt collection practice prohibited by the FDCPA is harassment. The debt collector is limited in when they can call you and how often. The debt collector is not allowed to call you multiple times per day at any time of the day.
According to the law, a debt collector may only call you between 8 a.m. to 9 p.m.
Further, the debt collector cannot:
- Contact you more than seven times in seven days to discuss the debt
- Call you about the debt within seven days after they first talk to you on the phone about it
In addition, you can stop all debt collector phone calls if you choose. You will simply need to tell the debt collector to stop calling you (or contacting you altogether), and they will have to honor your wishes.
You are better off asking a lawyer to put this request in writing so you have a record of it in case you need legal action. Be very specific with your language so there are no ambiguities. If you do not want phone calls, use that language precisely. If you want to cut off all communication, you should be clear about it.
You can also put limits on how the debt collector can contact you. For example, if they have called you at work, you can tell them not to call you when you are on the job. You can tell them that they can only contact you in writing. The debt collector must listen to whatever you say.
However, the debt collector can still keep trying to collect the debt in the meantime. They can still take legal action or do whatever else they can within the confines of the law, even if they cannot talk to you. The debt collector has purchased your debt to take you to court eventually.
FDCPA still allows debt collectors to do their job in a legitimate manner that follows the law.
Debt Collectors May Threaten and Intimidate You
The debt collector also cannot speak to you in certain ways when they talk to you. For example, they cannot use profanity or make certain threats. They cannot act in an abusive manner. There have been instances in which debt collectors have even threatened to dig up dead bodies for unpaid funeral debts. Others have threatened to arrest the debtor as an intimidation tactic, even when they have no authority to do so,
One common illegal and abusive tactic is when the debt collector pretends they have the legal authority and the ability to punish you. They may pretend to be a lawyer or affiliated with one. They may threaten you with prosecution, even though the most they can do is initiate a civil lawsuit to collect the debt. In one extreme case, a debt collector even summoned a debtor to an office set up to look like a courtroom and subjected them to a mock trial that the debtor thought was real.
Debt Collectors May Also Try to Deceive You
Debt collectors cannot make any false statements or use any form of deception when trying to collect a debt. Some debt collectors may lie to you about possible consequences when you do not pay what you owe. Many debt collectors stretch the truth to scare you and persuade you to pay them now. Any money that they get from you is a big win for them.
Another illegal practice is when a debt collector attempts to collect a debt that never existed in the first place. They can invent a fictitious debt and try to take steps to pressure someone unsuspected and afraid.
The average person feels fear when contacted by someone claiming to be a debt collector. They might be inclined to do whatever the collector says because they are afraid of the potential consequences if they do not. People even end up paying money they never owed because they were preyed upon by a debt collector.
Similarly, a debt collector may try to attach a bogus fee to a legitimate debt. For example, they may claim that the debtor needs to pay some time of legal or administrative fee that does not exist. They will add it to the debt and keep trying to collect it, even after the debtor has paid what they really owed.
You Can Take Legal Action When the Debt Collector Breaks the Law
You do not simply have to endure abusive debt collection practices. You have several legal options, including one that can result in financial compensation when you can prove the debt collector broke the law. An experienced attorney can help you stand up for yourself and put a stop to illegal conduct.
First, you can file a complaint about the debt collector to:
- The Federal Trade Commission, which is the federal entity overseeing debt collectors and taking enforcement action against them
- Your state’s attorney general, who can also take enforcement action against the debt collector
These steps can result in an investigation, leading to fines or even the debt collection company shutting down entirely.
You Can Recover Financial Damages When the Debt Collector Breaks the Law
The FDCPA includes a provision that gives you a cause of action against the debtor when they have broken the law. You can sue them directly in federal or state court under the law. The debt collector can be obligated to pay you both statutory damages and for what they have done to you personally.
FDCPA lawsuit damages can include:
- A statutory penalty of $1,000 (this is a one-time penalty assessed against one debt collector, as opposed to being for one violation)
- The emotional distress that you suffered from the debt collector’s illegal and abusive actions
- Medical costs necessary to treat the condition that you developed because of the debt collector’s illegal actions
- Lost income if you missed work because of your condition or if the debt collector’s actions damaged your standing at your job
No matter how egregious the debt collector’s conduct, you cannot obtain punitive damages under the FDCPA.
Another alternative is that you can file or join a class action lawsuit against the debtor if you have not suffered any particularized injury. The court might order the debt collector to pay up to $500,000 or 1 percent of their net worth, whichever is less.
You may also file a lawsuit against the debtor in state court under state law. You can recover similar damages and the potential for punitive damages (which are not allowable under the FDCPA). Most states have some form of law covering conduct similar to what the FDCPA prohibits. You may even sue under common law theories, such as intentional infliction of emotional distress.
Learn about Your Legal Rights by Contacting an Experienced Consumer Protection Attorney
If you have any questions about what a debt collector can do, you can review the literature published by the Consumer Financial Protection Bureau that explains the law. However, the process can still be challenging and confusing, so you should also contact an experienced lawyer to review the facts of your case.
A consumer protection attorney can advise whether the debt collector’s conduct was illegal and whether you can take action to seek legal relief. Your lawyer can also tell you what you need to do to stop the illegal conduct, whether through filing a complaint with the government or a lawsuit in civil court.
Never assume you are at the mercy of debt collection companies. If you suspect a collector engaged in unlawful conduct, seek legal assistance.