It’s easy to feel overwhelmed and even more than a bit intimidated when you have credit troubles. Creditors, and especially collection agencies, have a way of making threats – both actual and implied – that can make you feel that they have the force of law behind them.
But creditors can’t do whatever they want to do. You actually have protection under the law when it comes to creditors. It’s known as the Fair Debt Collection Practices Act (FDCPA), that’s administered by the Federal Trade Commission. If you have credit problems, you need to be familiar with this Act.
Here are some of your rights as a debtor under FDCPA.
A Creditor Can’t Threaten You With Imprisonment
Let’s tackle the the biggest concern debtors have, and put it to rest immediately.
Overly aggressive collection agents have a way of implying that you can end up in jail as a result of not paying your debt. In addition to the fact that they are not allowed to directly make this claim, it’s also an empty threat. You can’t be sentenced to prison on unpaid debt.
Section 807 (4) of the FDCPA specifically states that the following is a violation of the Act:
“The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.”
Should a creditor imply imprisonment, you should make it clear that such a threat is a violation of federal law, and you will file a complaint with the FTC if it’s implied again.
A Creditor Can’t Imply that They are Connected With the Government
In order to weaken your resistance, a collection agent may also attempt to make an implication of being affiliated with – or in some other way connected to – a government agency. This is also an illegal tactic, as spelled out in Section 827 (1):
“The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.”
Just an indication from you that you are aware that this tactic is illegal will usually be enough to put a stop to it.
A Creditor Can’t Contact You Without Properly Identifying Itself
One of the favorite strategies of collection agents is to hound you with phone calls. You can easily put a stop to this by screening your calls through voicemail. But an aggressive collection agent may not be deterred by that, and may attempt to contact you by posing as someone else. The agent may collect information using a false identity in an attempt to gain an unfair advantage.
This is also illegal as spelled out in FDCPA Section 807 (11):
“The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.”
Section 808 (8) also makes illegal the use of a bogus return address on correspondence sent to you:
“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.”
A Collection Agency Cannot Collect on a Bogus or Unidentified Debt
Since collection agencies are not direct creditors, but represent creditors, the possibility exists that they can attempt to collect a debt from you that you do not owe. If you do have other unpaid debts, you might simply assume that the caller is right, and make an attempt to pay it. But when a creditor or collection agency contacts you in regard to any debt, they must clearly identify the debt in question, including the identity of the original creditor.
According to FDCPA Section 809 (5), the creditor or collection agency is in violation of the act if they don’t provide you within five days:
“a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.”
If you are being contacted to settle a debt that you do not believe that you owe, you have the legal right to require the caller to disclose the details of the debt to you in writing. But you must make the request within 30 days of the initial contact, or the obligation can legally be assumed to be legitimately yours.
Even If You Know the Law You May Still Need Legal Representation
It’s one thing to know the provisions of the law, and quite another to be able to use it to your advantage. FDCPA is a complex law, and like most laws it’s best understood by attorneys. If you are having difficulty with one or more creditors or collection agencies, it’s always best to get legal counsel.
And when credit is the issue, you need a law firm that specializes in credit. Collection agencies in particular can be highly adept at knowing exactly how far to push the legal limits. It will take a skilled, knowledgeable attorney to put them back in their place.
If you’re feeling overwhelmed by collection agents, or even the original creditors, you can take a definitive step toward leveling the playing field by having your own law firm. That will put an end to the harassing phone calls and letters, as well as implied threats.
And how good will that feel?