Consumer complaints about debt collection harassment on the rise. Again.
July 12, 2010 by Todd Murray · Leave a Comment
According to a recent CNNMoney.com story, consumer complaints about debt collector harassment soared 50% to 67,550 in 2009 and are on pace to grow another 13% in 2010. And complaints of debt collectors threatening or actually using violence more than doubled in 2009, to 2,517. The reason for these increases in these aggressive collection tactics seems pretty obvious. With unemployment at a record high, debt collectors simply can’t squeeze as much money from consumers as they used to. So they’ve resorted to more aggressive–and often illegal–collection tactics.
Although, if you believe the debt collectors, it’s not their fault. According a Mark Schiffman, a collection industry spokesman, the rise is consumer complaints should be blamed on…wait for it…consumers! In the story, Schiffman attempts to deflect blame from the collection industry by noting that “there’s a growing industry of consumer attorneys and savvy consumers who have learned that they can sue a debt collector fairly easily and collect very easily.” So according to Schiffman, it’s not that debt collectors are harassing more people, they’re just getting called on it more often by “savvy” consumers and their lawyers.
To learn more about your rights under the Fair Debt Collection Practices Act, consider downloading my free guide FDCPA Basics. And if you’ve been harassed or abused by a debt collector and want to stand up for your rights, feel free to contact me for a free case review.
Debt Collectors Get Nasty | CNNMoney.com | July 10, 2010
Star Tribune story on people being put in jail by debt collectors
June 9, 2010 by Todd Murray · Leave a Comment
Over the weekend, the Star Tribune ran a story about people that have been put in jail by debt collectors. As I’ve written about in the past, these people are not being put in jail for not paying their debts. Instead, they’re being jailed for not filling out a court-mandated form or for not appearing at a court hearing. But as the story points out, the problem is that many of these people: (a) never received the court forms or notices; or (b) had no idea that they could go to jail if they didn’t follow the rules.
This is yet another example of debt collectors using court rules to bully and intimidate people to make a buck. And while I agree that there should be penalties for not following court rules, this is going too far. No one should end up in jail from a debt collection case. Ever. Period. End of story.
In jail for being in debt | Star Tribune | June 9, 2010
Is jailing debtors the same as debtors jail? | Star Tribune | June 9, 2010
What to know: Avoiding warrants | Star Tribune | June 9, 2010
Top five companies using debt arrest warrants | Star Tribune | June 9, 2010
(photo: mksfly)
Can a debt collector call me at work?
March 17, 2010 by Todd Murray · Leave a Comment
Under the Fair Debt Collection Practices Act (FDCPA), a debt collector can’t call you at work if they know or should know that your employer prohibits you from receiving calls at work. The issues under this section are whether your employer prohibits personal calls at work and whether the collector knows about those provisions. Generally, if you tell the collector that you can’t take calls at work, that is enough to put them on notice. And some jobs–such as manufacturing, health care, and teaching–so obviously do not permit the employee to take personal calls at work that a debt collector should know that calls are prohibited without being told.
Other parts of the FDCPA, while not specifically related to collection calls at work, may also protect your job. For example, a debt collector can’t call you at inconvenient times or places. For many people, this includes their workplace. And you always have the right under the FDCPA to tell the debt collector to cease all contact with you, whether at your job or otherwise. It’s also important to note that a debt collector can’t call your co-workers or boss about your debt, except for location information in some situations.
If you live in Minnesota and want to stop the harassing debt collection calls at work, feel free to contact me for a free case evaluation.
(phote: Apreche)
How to request validation of a debt
March 11, 2010 by Todd Murray · Leave a Comment
The Fair Debt Collection Practices Act (FDCPA) gives consumers the right to request validation of a debt. Under the FDCPA, a debt collector must send you a written notice within 5 days of their first communication with you. The notice must tell you, among other things, about your right to request validation of the debt.
In my experience, consumers should almost always request validation of the debt, particularly if a debt buyer is involved, because the more information you have, the better. But here are a couple things to keep in mind about the validation process:
- You must request validation in writing and you must request it within 30 days of your receipt of the required notice. Under the FDCPA, a debt collector doesn’t have to honor a request for validation unless it’s in writing and unless they receive it within 30 days of your receipt of the notice. As a practical matter, many debt collectors will honor a verbal request for validation and some will even honor a request made after the 30 days. But if you want to protect your right to have your debt validated, you must do it in writing and within 30 days. I recommend sending the letter via certified mail so that you can prove that they received it and when they received it.
- Once you’ve properly requested validation, the debt collector must cease all collection attempts until they provide it to you. There are some websites that claim that a debt collector must validate a debt within 30 days and if they don’t the debt is forgiven. This is simply not true. There is no time limit to how long the debt collector has to validate your debt. They just can’t call you, write you, sue you, or take any other action until they validate. If they do, they’ve violated the FDCPA.
- A debt collector can’t use your failure to request validation of a debt against you. The FDCPA prevents collectors from using your failure to request validation as evidence that you owe the debt.
- There aren’t any clear requirements about what type of documents are sufficient validation. The FDCPA doesn’t define validation, and the FTC has said that validation only needs to confirm that the debt collector is pursuing the right person and the right amount.
- Collection activity during the 30 day validation period can’t “overshadow” your right to request validation. This can be a little tricky, but here’s an example: let’s say you receive the validation notice on March 1 and then they serve you with a lawsuit on March 5. Under the FDCPA, you have 30 days–or until March 31–to request validation. And in Minnesota you have 20 days–or until March 26–to respond to a lawsuit. So because you have to answer the lawsuit before your time to request validation is up, the lawsuit “overshadows” your right to request validation. This is a violation of the FDCPA.
Feel free to downloand my free validation letter form and instructions. And if you live in Minnesota and believe that a debt collector has violated your rights under the FDCPA, feel free to contact me for a free case evaluation.
Texas man fights back against debt collectors
February 2, 2010 by Todd Murray · Leave a Comment
Craig Cunningham grew tired of repeated debt collection calls. So he decided to fight back by suing the debt collectors for violating the FDCPA and Texas state laws. In fact, Cunningham has filed 18 lawsuits and won over $20,000 from debt collectors. The story details a number of the tactics Cunningham has developed to bait collectors into violating the law. According to the story, he’s created quite a stir among the collection industry. In response to Cunningham and others like him, a new business opportunity has sprung up–one dedicated to helping collection agencies identify and avoid repeat FDCPA litigants.
I have mixed feelings about this story. On the one hand, I have a hard time mustering any sympathy for the debt collection industry–an industry that receives more consumer complaints than any other. But the FDCPA, and state laws like it, are designed to protect people against debt collection harassment and abuse. They’re not designed to be used to game the system to avoid paying debts. I’m also concerned that the debt collection industry will point to Cunningham and other aggressive debtors in their fight against stronger consumer regulations.
Dallas Observer | Better Off Deadbeat: Craig Cunningham Has a Simple Solution for Getting Bill Collectors Off His Back. He Sues Them | January 20, 2010 (via Consumerist)
