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debt collector Archives | Ovation Credit Repair Services

Can Debt Collectors Contact Friends and Family Members?

By | Ask a Credit Expert, Collections, Consumer Rights, Credit Repair, Debt, End Debt Collector Abuse Act of 2010, Fair Debt Collection Practices Act

It is not uncommon for debt collectors to go to extreme measures in order to get information about a debtor.  In fact, many debt collectors call friends and family members of debtors they are trying to reach.  While this practice is permitted and regulated by the Fair Debt Collection Practices Act, it is frequently abused.

Are Debt Collectors Harassing You About Someone Else’s Debt?

Debt collectors are permitted to contact third parties for the purpose of acquiring location information about the debtor.  Section 804 provides the following:

Any debt collector communicating with any person other than the consumer for the purpose of acquiring location infor­mation about the consumer shall identify himself, state that he is confirming or correct­ing location information concerning the consumer, and, only if expressly requested, identify his employer.

Debt collectors are prohibited from stating that such consumer owes any debt.  They may not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information.  Debt collectors may not communicate by post card and they may not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communi­cation relates to the collection of a debt.

By the way, if the debt collector knows the consumer is repre­sented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorney’s name and address, they may not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to the communication from the debt collector.  In this case, family and friends may not be contacted at all.

How Can You Stop Debt Collectors from Harassing You About Someone Else’s Debt?

The purpose here is to allow debt collectors to try to obtain location information.  That makes sense.    However, many debt collectors abuse this provision to harass family members and friends in an effort to get the debtors to respond.  This practice is unethical, and it is illegal.  If you are being contacted by a debt collector regarding someone else’s debts, and the debt collector is violating the provisions above, let us know.  We’ll help you locate an attorney in your area that can help protect you from this type of abuse.

By the way, if the debt collector knows the consumer is repre­sented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorney’s name and address, they may not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to the communication from the debt collector.

 

Validation of Debt

By | Collections, Consumer Rights, Credit Laws, Debt

Under the Fair Debt Collection Practices Act, debt collectors have certain obligations when first communicating with a consumer about a debt.  The debt collector must provide certain information within five days of the initial contact with the consumer.  That information includes the amount of the debt and the name of the creditor to whom the debt is owed. 

The debt collector must also provide certain statements within five days of the initial communication.  The following statements are required:

  1. A statement that the debt will be assumed to be valid by the debt collector unless the consumer, disputes the validity of the debt, or any portion thereof, the debt within thirty days after receipt of the notice;
  2. A statement that the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed; and
  3. A statement that the debt collector will provide the consumer with the name and address of the original creditor if different from the current creditor upon the consumer’s written request within the thirty-day period.

Keep in mind that a communication in the form of a formal pleading in a civil action is not considered an “initial communication.”

Validating the Debt:

If the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector must cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt.  The debt collector can satisfy this requirement by obtaining a copy of a judgment or other specific account information and mailing the information to the consumer.

Also, if the consumer has requested the name and address of the original creditor, the debt collector must cease collection of the debt, or any disputed portion thereof, until the debt collector obtains the name and address of the original creditor and that information is mailed to the consumer by the debt collector.

Debt collectors are allowed to proceed with lawful collection activity during the thirty day period prior to receipt of a dispute.  Any collection activities and communication during the thirty day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.

What happens if the consumer does not demand validation of the debt within the thirty day period?

If the consumer does not dispute the validity of the debt during the thirty day period, the debt collector may assume that the debt is valid for collection purposes.  However, the failure of a consumer to dispute the validity of a debt may not be construed by any court as an admission of liability by the consumer.

What does this mean?

When you are contacted by a debt collector in regard to a debt that you allegedly owe, it does not mean that the debt collector has access to the information necessary to validate the debt.  While some debt collectors have this information in advance of an initial contact, many debt collectors only attempt to validate a debt if the consumer requests during the thirty day period.  If the debt cannot be validated, the debt collector must cease additional collection activity.  Also, if a debt cannot be validated, the debt cannot be reported on your credit profile.

FDCPA: Harassment and Unfair Conduct

By | Consumer Rights, Credit Laws, Debt, Personal Finance, Your Credit

How can you tell if a debt collector is harassing you, or just legally attempting to collect a debt?  This is part 2 of a series of posts relating to debt collection and credit repair.  The Fair Debt Collection Practice Act defines conduct that is considered harassment.  According to the Act, 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.

Debt collectors are prohibited from the use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.  They also may not use obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.

Debt collectors may not publish a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency (like Equifax, Experian and TransUnion) or to a few specifically defined entities.   Reporting a debt in collection to the credit bureaus has a significant impact on credit scores, and in essence, is available to anyone that may have a valid purpose to review your credit report.  This includes lenders, employers, insurance companies, etc.  Regardless of how it is ultimately resolved, an account in collection is never a good thing to have on a credit report.  Reporting to the bureaus may be the single most effective tool for debt collectors prior to initiating a lawsuit.   Debt Collectors may not advertise for the sale of any debt to coerce payment of the debt. 

Although vague, the Act also provides that a debt collector may not cause a telephone to ring or engage any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.   Debt collectors must also disclose of the caller’s identity.

Apparently it is not harassment if the debt collector calls repeatedly or continuously without the intent to annoy, abuse or harass.   Let’s face it, debt collectors call repeatedly hoping that you will get tired enough of hearing from them that you will pay a debt.   Now isn’t that annoying?

Harassment is one form of prohibited conduct.  The Act also defines unfair conduct.  A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.  The following debt collection conduct is deemed to be unfair or unconscionable:

  1. The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.
  2. The acceptance by a debt collector from any person of a check or other payment instrument postdated by more than five days unless such person is notified in writing of the debt collector’s intent to deposit such check or instrument not more than ten nor less than three business days prior to such deposit.
  3. The solicitation by a debt collector of any postdated check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution.
  4.  Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.
  5. Causing charges to be made to any person for communications by concealment of the true propose of the communication. Such charges include, but are not limited to, collect telephone calls and telegram fees.
  6. Taking or threatening to take any non-judicial action to effect dispossession or disablement of property if (A) there is no present right to possession of the property claimed as collateral through an enforceable security interest;  (B) there is no present intention to take possession of the property; or (C) the property is exempt by law from such dispossession or disablement.
  7. Communicating with a consumer regarding a debt by post card.
  8.  Using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.

Be sure to document any violations.  There are civil remedies available (which will be detailed in another post) for debtors that are victims of debt collectors that engage in harassing or unfair conduct.

How Does Debt Collection Impact Credit Repair?

By | Consumer Rights, Credit Laws, Credit Repair, Debt, End Debt Collector Abuse Act of 2010

If you have ever been contacted by a debt collector, you probably already know that they can be aggressive.   Debt collectors are governed by the Fair Debt Collection Practices Act.  While any contact from a debt collector may appear harassing, the Act actually defines those actions that are legally permissible.  This post addresses some of the restraints regarding communication from debt collectors in regard to legitimate debts. 

When can a debt collector contact you?  Generally, a debt collector may not communicate with a consumer in connection with the collection of any debt at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.  In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o’clock in the morning and before 9 o’clock at night.

What if you are represented by an attorney? Debt collectors may not communicate with a consumer in connection with the collection of any debt if the debt collector knows the consumer is represented by an attorney with respect to the debt and has or can ascertain the attorney’s name and address.  There is an exception if the attorney fails to respond within a reasonable period of time to a communication from the debt collector or if the attorney consents to direct communication.

Has a debt collector contacted you at work? Debt collectors may not contact the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.

Has a debt collector called your neighbors, friends and/or family?  In most cases, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

What can you do if a debt collector is contacting you about a valid debt? If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except to advise the consumer that the debt collector’s further efforts are being terminated or to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor.

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