Can They Do That? Illegal Practices of Debt Collectors

It's important to know that, even if you are indebted to a creditor (or several), that you still have rights. If you borrowed money from a creditor or lender, and that loan has fallen into default, you may be contacted by a debt collector.

First things first, let's talk about what happens to a debt that falls into "default." Default is a fancy legal term that means "failure to fulfill an obligation." When you stop making payments that you previously agreed to pay, your loan is considered to be in default. It doesn't matter what reason(s) have rendered you unable to make the payments - at least at first*. Initially, the only thing banks (lenders/creditors) care about is their bottom dollar. If your default is messing with their bottom line, they will become laser-focused on getting you to resume making payments.

Why is a totally different agency contacting me instead of my lender?

Big and even medium-sized lenders often do not have time to chase after borrowers who stop paying, so many of them hire a collection agency to retrieve as much money from debtors as possible. Collection agencies work for predetermined fees or for a percentage of the amount of money they are able to recover. This in itself is precisely why so many collection agencies have engaged in unethical, deceitful and/or ruthless tactics attempting to coerce defaulted borrowers to make a payment.

Is this even legal? How far can collection agencies go?

In 2013-2014, the Consumer Financial Protection Bureau started taking action on behalf of consumers who were being mistreated and even harassed by debt collection agencies. By 2015, the Fair Debt Collection Practices Act (FDCPA) was solidly in place protecting borrowers from agencies who continued to violate the FDCPA.

What follows is a list of things that debt collectors are prohibited from doing under the Fair Debt Collection Practices Act:

• Call or contact you at times that are inconvenient for you, such as before 8:00AM or after 9:00PM in the timezone in which you reside.
• Have any form of contact with you at your place of employment if they have been asked not to do so.
• Present themselves as anyone other than who they really are in order to coerce you into making a payment. They may not, for example, tell you that they work for the US government to try to scare you.
• Repeatedly call or contact your family members. The FDCPA allows debt collectors to contact third parties about you one time only, and then only if they are attempting to establish initial contact with you. They may ask a third party for your phone number, address and place of employment. Other than those details, they are prohibited from sharing any information about your debt with third parties, with the exception of your attorney and your spouse (if applicable).
• Make any claims or statements that are not 100% true. Debt collection agencies cannot, for example, tell you that: you are guilty of a crime, that you will be arrested, that you owe more money than you thought, etc.
• Engage in any behavior that is harassing in nature, like: threatening you in any way, using foul and offensive language, calling you over and over in an attempt to break your will (in hopes that you will pay just to be left alone).

Debt collectors are also forbidden to continue contacting you if you write them a letter explaining that you do not actually owe the money in question (if, in fact, they are contacting you in error). If you decide to do so, remember to write a physical letter, as opposed to an email. Also, be sure to send the letter via the USPS Certified Mail - Return Receipt Requested. Using this mailing method will give you proof that you sent the letter (with receipt) as well as proof that the recipient received it (via electronic signature).

If a debt collector has exhibited any of the behaviors listed above, you can actually take them to court and sue them for violating the FDCPA. You should contact a debt resolution attorney if you feel that the FDCPA has indeed been violated. It is important to note that suing a collection agency for unethical practices won't wipe out your debt, if you do indeed owe someone money. However, owing a debt does not entitle anyone to harass you, and that behavior is prohibited by law.

Veitengruber Law can help you defend your rights as a debtor. We can also file a lawsuit against any corrupt collection agencies. Most importantly, we will assist you with getting your debt(s) settled in the most effective way possible so that you can stop looking over your shoulder and start getting out from under the burden that your debt has undoubtedly placed upon you*.