If someone is harassing you about a debt you owe, if they demand that you shell out more than what’s due, if they threaten you with dire consequences if you don’t pony up, it’s probably not a loan shark’s henchman coming after your knees.
Though not far from it.
Economic times are tough and debt collectors are getting tougher. More and more often collectors use intimidation and other tactics that violate federal law to get you to cough up the dough you owe.
Sure you owe the money, but life isn’t a mob movie. You’ve got rights under the Fair Debt Collections Practices Act (FDCPA). Debt collectors have to treat you with respect.
The FTC received 140,036 debt collection complaints in 2010, up from 119,609 in 2009. The complaints comprised more than one in four (27 percent) of all consumer complaints the agency tracked in 2010, up from 22.8 percent in 2009.
Complaints typically carry more than one charge, they reveal what rights are being violated and the numbers indicate more heavy-handed tactics are on the rise.
Harassment – FDCPA prohibits a variety of harassment techniques during debt collection efforts. Nearly half of all FDCPA complainants, 49.7 percent, claimed collectors repeatedly or continuously called them, up from 46.5 percent in 2009.
Claims a collector used obscene, profane, or otherwise abusive language comprised 16 percent of FDCPA complaints, about the same as in 2009.
Allegations that collectors called before 8:00 a.m., after 9:00 p.m., or at other times that the collectors knew or should have known were inconvenient to the consumer, made up 11.8 percent of complaints, up from 11 percent in 2009.
The use of or the threat to use violence was up also from 2.9 percent in 2009 to 3.8 in 2010.
Demanding more than is legally permitted – FDCPA prohibits debt collectors from misrepresenting the character, amount, or legal status of a debt. The types of complaints include, collectors attempting to collect either a debt the consumer does not owe or a debt larger than what the consumer actually owes and collectors attempting to collect debts that have been discharged in bankruptcy.
The category was the second most common FDCPA complaint, accounting for 30.4 of FDCPA complaints in 2010, down from 31.1 percent in 2009.
The FDCPA also prohibits debt collectors from collecting any amount not expressly authorized by the agreement creating the debt or permitted by law. Potential violations accounted for 9.7 percent of FDCPA complaints, down from 10.9 percent in 2009.
Threatening dire consequences – Debt collectors are banned from making threats about what could happen if the consumer fails to pay the debt, unless the collector has the legal authority and the intent to take the threatened action.
In 2010, 25.3 percent of FDCPA complaints reported that collectors falsely threatened a lawsuit or some other action, up from 20.9 percent in 2009. Another 18.6 percent of complaints stemmed from allegations that collectors falsely threatened arrest or seizure of property, up from the 13 percent in 2009.
Other complaints included charges concerning
• Collectors failing to identify themselves as a collector. Consumers don’t receive identifying information may, under false pretenses, reveal information that will later be used against them. Complaints rose from 19.7 percent of all complaints in 2009 to 22.8 percent in 2010.
• Revealing debt to third parties. The FDCPA allows third party contact only to determine a consumer’s location. Revealing to third parties information about the debt or other matters associated with the debt is considered intimidation. Last year 21.8 percent of FDCPA complaints claimed that bill collectors repeatedly called a third party — employers, relatives, children, neighbors, and friends — up from 19.2 percent in 2009.
• Making illegal calls to consumer’s job. A debt collector may not contact a consumer at work if the collector knows or has reason to know that the consumers employer prohibits such contacts. Nevertheless, 15.6 percent of FDCPA complaints up from 13.6 percent fell into this category.
Complaints also included charges that the consumer did not receive a required disclosure that states the amount of the debt, the creditor and a notice telling them how to dispute the debt; that the collector failed to verify a disputed debt and that the collector continued to contact the consumer after the consumer told them, in writing, to call off the dogs.
The “cease communication” notice doesn’t prevent the collector or creditor from filing suit against the consumer, but the collector and creditor must stop calling and sending collection notices.
Learn more about your rights under the Fair Debt Collections Practices Act (FDCPA)