Thursday, July 31, 2008
The Fair Debt Collection Practices Act, prohibits deceptive, unfair and abusive practices by third-party collectors. The act doesn't apply to a company's in-house debt collectors, but the FTC can go after in-house collectors due to a provision of the Federal Trade Commission Act that prohibits "unfair and deceptive acts in commerce."
If you are being harassed by a debt collector, here are steps you can take to ensure that you resolve your situation quickly:
1. Don't ignore calls or written communications from collectors.
"As long as the collector is not being abusive, it's a good idea to communicate with the collector because if you don't owe the money, you'll be able to convince the collector to go away," Kane said.
"If you do owe the money, you may be able to work out some partial payment or long-term payment, which you may not be able to do if you don't maintain some line of communication with the collector."
2. Make the collector prove you owe the debt.
Within five days after you're first contacted, the collector must send you a written notice telling you the amount you owe, the creditor to whom you owe the money and what to do if you believe you don't owe the money.
3. If a collector calls about a bill you already paid, send them proof in writing that you met the obligation.
Respond in writing and provide documents showing the account has been paid or settled in full. If you don't have the records, you can dispute the debt or try to get proof from the original creditor.
4. Don't tolerate abuse from debt collectors
Collectors cannot threaten violence or publish a list of consumers who refuse to pay their debts (except to credit bureaus). They cannot use obscene or profane language, or repeatedly use the telephone to annoy you. They cannot call you at work if you tell the collector that your employer will not allow it.
Collectors are prohibited from revealing the existence of your debt to any other party unless you've given consent or a court has given permission.
A collector may contact a third party to find out your whereabouts. They can learn where you live, your home phone number and where you work. They are not entitled to your work number, although they can easily obtain it once they know where you work.
5. Take action if you are being harassed with collection calls.
Send the debt collector a written notice to cease communications in connection with the debt or written notice that you refuse to pay it. Send the notice directly to the debt collector via certified mail, with a return receipt to document proof the collector received your cease and desist notice.
Once the collection firm receives your notice, it must stop contacting you, other than to tell you that the collector or creditor may invoke further specified legal steps to collect the debt.
The best way to deal with debt collectors is to communicate with them quickly, document all communications, and to try to work out a payment plan, if possible.
Tuesday, July 29, 2008
In the case of Reichert v. National Credit Systems in the UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT, Judge Mary Schroeder, ruled that the federal Fair Debt Collection Practices Act requires debt collectors to prove that they have used detailed procedures to ensure that they do not take actions that are prohibited by the act, such as harassing consumers, overbilling or making deceptive statements.
"A debt collector is not entitled to just sit back and wait until a creditor makes a mistake and then institute procedures to prevent an occurrence," the court ruled.
The case involved an Arizona consumer, Robert Reichert, who was contacted by a debt collector about an outstanding bill from his old apartment complex. The debt collector, National Credit Systems Inc., had tacked on charges for "attorney's fees," but couldn't explain where the charges came from. The collection agency claimed that it had overlooked the error because the landlord-creditor had always provided accurate information in the past. The court rejected that defense, holding that debt collectors must show detailed preventive procedures to escape liability for their actions.
"The court's ruling will compel debt collectors to police themselves more effectively," said Deepak Gupta, an attorney for Public Citizen who argued the case. "The ruling is very significant at a time in which increasing numbers of Americans are being contacted by debt collectors and abuses are on the rise."
Friday, July 25, 2008
This is a direct violation of the Fair Credit Reporting Act which states "The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system."
Tuesday, July 22, 2008
Federal rules regulate debt collection activity. Thirty eight percent of the FDCPA complaints in 2007 were due to debt collectors attempting to collect a debt not owed or an amount larger than the actual debt. According to the Fair Debt Collection Practices Act, debt collectors are not allowed to call consumers at the consumer's place of employment, before 8:00 a.m. or after 9:00 p.m. or if the consumer is represented by an attorney. If you are being harassed, call 866.553.3272 for a free consultation.
Thursday, July 10, 2008
"ZOMBIE DEBT RISES FROM THE GRAVE TO GET YOU"
Article posted in 03/25/08 Tampa Bay Times
Article taken from Newsday
After Kim Mullen filed for bankruptcy in 1993, she cut up all her credit cards. Since then, the Long Island resident has managed to obtain a good credit rating.
But four months ago, a debt collector contacted her, saying she had an unpaid card balance of $5,655 from 1992. With interest, the letter claimed, the debt had grown to $19,400.
As old debt seems to rise from the dead, it’s taken on a name – zombie debt. And in recent years, more such debt is coming back to haunt consumers, according to lawyers who specialize in debt.
Many credit card companies have started selling delinquent accounts to collectors to boost quarterly earnings, according to a report by Kaulkin Ginsberg, a Maryland-based adviser on debt collection. The collectors then resell some of that debt to other collection agencies.