Debt Collector Complaints Are On the Rise: Know Your Rights!
|A consumer educator and advocate, Gerri Detweiler has been helping Americans
solve their credit problems for more than a decade. She is the author of
Ultimate Credit Handbook (Plume, 1993, revised 2003), which was featured in
Money magazine as one of the five best new personal finance books of the
year when released. You can reach Gerri by
visiting her web site
or listening to her
With the ongoing credit crisis, a lot of people
are getting calls from debt collectors. Most of these collectors are merely
trying to do their job, but there are some among them who are so money-hungry
(in many cases motivated by bonuses and commissions) that they will go so far as
to violate the regulations of the federal Fair Debt Collection Practices Act. As
a result, complaints against debt collectors are on the increase according to
the Better Business Bureau and federal regulators. The FTC reported that it
received more complaints I 2007 about debt collectors than in reference to any
These are the top complaints received about debt
collectors by the FTC in 2007:
1. DEMANDING A LARGER PAYMENT THAN IS
PERMITTED BY LAW
The provisions of the federal Fair Debt
Collection Practices Act (FDCPA) bar debt collectors from inflating the amount,
character or legal status of a debt. They cannot add interest or fees unless
state law allows for this; they are also not permitted to harass you over a debt
which you do not owe, or try to collect a debt that has been discharged by a
bankruptcy proceeding. Yet, over 27,000 consumers complained about this sort of
conduct in 2007.
Tip: You have a right to ask debt
collectors to verify the debt they are trying to collect in writing; however,
you must do this within 30 days after you are first contacted about the debt.
You need to request this in writing. We recommend you send your letter by
certified mail with return receipt requested and keep a copy for your own
2. HARASSING THE ALLEGED DEBTOR OR OTHERS
Under the regulations of the FDCPA, debt
collectors are barred from using harassment to collect a debt. Some examples:
They are not allowed to phone debtors repeatedly, threaten them with violence,
or use profanity and other offensive language when communicating with them.
However, many of the reports received in 2007 by the FTC were from consumers
claiming that debt collectors had:
• Harassed them by calling repeatedly or
continuously • Used obscene, profane or otherwise abusive language • Called them
before 8:00 a.m. or after 9:00 p.m. • Used or threatened violence if they failed
to pay the debt in question.
Tip: Always keep a written record of
any contact you have with debt collectors. You can use the free Collector
Contact Worksheet found at http://www.Credit.com/StopDebtCollectors. These
records will be important if you should file a lawsuit against a debt collector.
3. THREATENING DIRE CONSEQUENCES IF A CONSUMER
FAILS TO PAY A DEBT
Debt collectors may not threaten to take any
action which they do not have legal authority to take.
A debt collector will usually have to sue a
debtor and get a judgment against them before they are able to garnish wages or
seize property to collect a debt. Debt collectors cannot threaten consumers by
telling them that they will be jailed or lose their jobs if they fail to pay the
debt. Even a threat to report the debt to consumer credit reporting agencies is
illegal if these debts are too old.
4. MAKING IMPERMISSIBLE CALLS TO A CONSUMER’S
PLACE OF EMPLOYMENT
Under the FDCPA, debt collectors are not allowed
to call debtors at work if they can reasonably assume that such calls are
prohibited by the employer. More than 4,000 complaints were made in 2007 for
this violation of the FDCPA.
Tip: If you instruct a debt collector
not to call you at work, they must cease doing so immediately. We recommend you
follow up your request in writing, and if they continue to call, contact an
5. REVEALING ALLEGED DEBT TO THIRD PARTIES
Under the FDCPA, debt collectors are allowed to
call other people only in an effort to locate you. They may not call anyone else
about your debt if they already are aware of how to contact you. When contacting
others to try to get in touch with you, they may not discuss your debt with
anyone except for your attorney, spouse or cosigner.
The FTC helpfully points out that debt collectors
who take the step of talking about a debt with someone other than the debtor,
their spouse, cosigner or attorney is doing so in an effort to embarrass or
intimidate the consumer into paying the debt. This tactic can cause serious
damage to the debtor's reputation and even cost them their jobs.
6. FAILING TO VERIFY DISPUTED DEBTS
Once you are contacted by a debt collector, you
them have thirty days to request written verification of this debt. You can
dispute this debt in writing, which bard the collector from pursuing the debt
until they have provided this verification in writing. If the collector has been
reported to the credit reporting agencies, the collector then has to report to
these agencies that the debt is in dispute.
The FTC says that 1,848 consumers complained to
them in 2007 about debt collectors who failed to reply with these requirements
to provide written verification.
7. CONTINUING TO CONTACT A CONSUMER AFTER
RECEIVING A “CEASE COMMUNICATION” NOTICE
You can request in writing that a debt collector
cease contacting you about your debt. Once you have done this, they are only
allow to contact you to tell you that they are about to instigate legal action
against you to collect the debt.
Almost 3,500 consumers filed complaints with the
FTC in 2007 about debt collectors who ignored these requests to cease
Tip: A cease communication letter is
the right step to take in some cases, such as if the debt is very old or you are
certain that you do not actually owe this debt. However, we do not recommend you
send such a letter simply to avoid dealing with the debt, since this leaves the
debt collector no choice but to sue you for the debt.
Gerri Detweiler, Mary Reed and consumer law
attorney John Ventura are co-authors of
Collectors: How to Protect Your Rights and Resolve Your Debts