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Posts Tagged ‘Fair Debt Collection Practices Act’

Fed-up consumers are fighting back against overly aggressive debt collectors, slapping collection agencies and creditors with a record 7,923 lawsuits from January 1 through August 15, 2011, according to a report in Collections & Credit Risk.

By comparison, in the same period from a year ago, consumers filed only 7,169 such lawsuits. That means lawsuits against debt collectors are up more than 10% so far in 2011.

Topping the list of legal complaints were alleged violations of the Fair Debt Collection Practices Act, or FDCPA. Consumers claimed that collection agents violated the FDCPA in 7,249 of those lawsuits.

Violations of the Fair Credit Reporting Act, or FDCPA, were cited in 833 lawsuits, and Truth-in-Lending Act violations were cited in 705 cases.

The figures are based on data gathered from U.S. District Courts via WebRecon LLC, a Grand Rapids, Michigan based research firm.

As a sign of how busy the courts are, in the Aug. 1-15, 2011 period alone, nearly 500 different collection agencies and creditors were sued for various consumer statute violations.

The places where lawsuits were most frequently filed in the Aug. 1-15, 2011 period were: Colorado District Court, Denver, 33 lawsuits; New York Eastern District Court, Brooklyn, 25 lawsuits; and the California Central District Court, Los Angeles, and Pennsylvania Eastern District Court, Philadelphia, which each had 24 lawsuits.

If debt collectors are driving you crazy and using illegal, over-the-top tactics to try to force you to pay debts, here’s some advice on how to deal with those debt collectors.

Additionally, read this advice on what to do if you owe but can’t pay or you have received a court notice regarding a debt or a creditor.

Lastly, it’s vitally important to know your rights under the law, so here is a synopsis of the Fair Debt Collections Practices Act, which gives you 10 areas of protection. It also tells you what creditors legally can and can’t do.

Whatever the situation, if a debt collector violates your rights, document the incident and take action by reporting the agency to the Federal Trade Commission. Don’t stand for abusive creditors and collection agents who break the law.

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• most common lawsuits against debt collectors

A New York-based collection agency has been slapped with a lawsuit for allegedly making a bogus threat to sue a Louisiana woman.

The company in question is called Global Credit & Collection Corp. As a debt collector, it must abide by a federal law called the Fair Debt Collection Practices Act, or FDCPA. One aspect of the FDCPA forbids debt collectors from threatening to sue people if a company really doesn’t intend to do so. This aspect of the law was designed to stop abusive collectors from making idle threats about lawsuits as a way to harass and scare people into paying debts.

The New York woman suing Global Credit is named Wendy Trahan. Her lawsuit, filed in August 2011 in federal court in New Orleans, alleges that Global Credit violated the Fair Debt Collection Practices Act.

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According to the lawsuit, Global Credit contacted Trahan in January 2011 about a debt she owed to Capital One Services. The agency threatened to sue Trahan if she didn’t pay the debt — even though Global Credit did not have the ability to sue Trahan.

But the firm’s alleged misdeeds didn’t stop there.

Global Credit allegedly went on – one month later – to contact Trahan’s mother and falsely represented that there was a pending legal matter against Trahan. In her lawsuit, Trahan says Global Credit further contacted her father’s place of employment and left a voicemail regarding a breach of agreement.

Trahan is asking the court to award her actual damages, statutory damages, costs and attorney’s fees.

It will be interesting to see how this case turns out — especially since it represents an instance where a consumer appears to have turned the tables on an overzealous debt collector. Trahan also seems to have known her legal rights, something also consumers should know.

Even if you’re in debt, you do have rights. For more information about your rights under federal law, discover the 10 areas of protection you have under the Fair Debt Collection Practices Act.

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Under the Fair Debt Collection Practices Act, you have the right to send a bill collector a “debt validation” letter requesting more information about the debt you are being told is still outstanding. This letter prompts the bill collector to send you proof of debt in the form of a complete payment history, a copy of the initial loan agreement or credit card application, and proof that the company contacting you actually owns the debt or has been assigned the debt. While many bill collectors will send this information out to you within five days of receiving your letter, some may send you inadequate or incorrect information. Here’s what you need to do if you receive inconsistent or inadequate information about a debt from a bill collector:

The first thing you need to do is to write a dispute letter. Under the Fair Debt Collection Practices Act, you have the right to dispute a debt within thirty days of receiving notice about your debt. It is then the debt collector’s responsibility to verify the debt and provide you with adequate proof that you owe this debt, or they are no longer allowed to go after it.

If the debt collector insists that they are providing you with all the information you have, you can point them to Section 809 of the Fair Debt Collection Practices Act and indicate that your debt validation letter was sent in order to obtain a copy of all items listed there. This includes the total amount of debt owed, the name of the creditor to whom you owe the debut, a statement that states that the debt collector has assumed the debt, and a complete payment history. Remember you have the legal right to ask for this information, and a debt collector may not be able to collect from you if they fail to provide you with this information within five business days of receiving your debt validation letter.

If the debt collector does not provide the information you requested within five days, it’s time to escalate your case. You can contact your State’s Office of the Attorney General to report the bill collector or work with a local consumer advocate agency to voice a complaint. At this stage, you could also hire an attorney who could prepare a case or pursue the case further on your behalf. Getting professional legal advice is your best bet for dealing with a bill collector who fails to communicate and work with you. In some cases, you may be relieved of your debt entirely because of the debt collector’s failure to follow the law.

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Your bill collector may have sent you a letter contacting you about your outstanding debt or called you to introduce themselves. If you choose to accept a phone call and engage a debt collector in conversation, you may have more negotiating power if you record your call. You do have the right to record your phone calls with bill collectors, but only some people actually do. The most important reason to record your call is to have a record of the conversation that is about to transpire. You may need to use this conversation as proof of a negotiation or agreement at a later date. Informing the bill collector that you are recording the call also informs them that you are serious about the situation and are looking to come to some type of agreement.

Another reason to record your call is to prevent being abused or harassed by your creditor. Under the Fair Debt Collection Practices Act, it is unlawful for a bill collector to be abusive, make false threats or otherwise harass you over the phone, or through other forms of communication. If a bill collector is engaging in these activities and you are able to record the call, you can take them to court for breaking the law. The courts are most likely going to relieve you of your debts and may also pay you in damages after such an event.

Ultimately, recording a phone call with a bill collector will help to keep them in check. The person is much more likely to deal with you professionally – without harassment, intimidation or any type of abuse – if they know they are being taped. Keep in mind that bill collectors are trained to intimidate you, even if they don’t go to the extreme with harassment or by being abusive. They may say things in a certain way or use choice words to instill fear in you and prompt you to pay immediately. Remember that these are all tactics to get you to pay on the spot. You have every right to ignore their statements and choose the best course of action that you see fit, after confirming the debt and making an attempt to negotiate.

It’s always important to document everything and keep track of the date and time of the call, what you talked about, and any terms that were agreed upon. Recording a call will simply help with this process and can put you at an advantage when you want to negotiate and resolve your case.

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