Can a debt collector call my parents about my debt?

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Under the Fair Debt Collection Practices Act, debt collectors can only communicate with you or your attorney about your debt. There is a very narrow exception that permits debt collectors to contact third parties, such as your parents, but only to obtain location information. Location information is defined as your address and telephone number. During this conversation, the debt collector must tell your parents that they are attempting to confirm your location information, they must not tell them that you owe a debt, and are only allowed to identify the company they work for if asked. Of course, your parents have no obligation to provide your address and telephone number. Once the debt collector has your location information, there is no permissible reason under the FDCPA to contact your parents, or any third party for that matter.

It is fairly common for debt collectors to contact people’s parents about their debt. And its not just college students and recent college graduates. I’ve had clients in their 40’s and 50’s whose elderly parents were called by debt collectors. I suppose its possible that some debt collectors contact consumers’ parents by mistake. But I also think that some debt collectors call people’s parents as a collection tactic to put pressure on the consumer to pay the debt. Either way, its a violation of the FDCPA, unless it falls under the very narrow “location information” exception described above.

If you live in Minnesota and a debt collector has been calling your parents about your debt, feel free to contact me for a free case evaluation.

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What is wrongful repossession?

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When you buy a car or truck on credit, the contract typically gives the lender the right to repossess the vehicle as soon as you default on your loan. The contract will tell you what events lead to a “default” but the most common one is failure to make your monthly payments on time. But the lender has to follow certain steps, otherwise the repossession may be illegal.

2600233823_f9e1561c94First, if your lender has accepted late payments, it cannot repossess the car until the loan is again in default. And the lender has to give you notice, usually in the form of letter, that it will not accept further late payments. In Minnesota, this is called a Cobb letter. If your lender has accepted repeated late payments and then seizes your car without sending you a Cobb letter, it probably has wrongfully repossessed your car.

Second, the repossession agent hired by the lender cannot breach the peace during the repossession. In most states, including Minnesota, the repossession agent has the right to take your car without any notice at any time of day or night. No court order is necessary, as long as the repo agent does not breach the peace. Breach of the peace usually occurs when the repo man has to resort to force or threats of force to take your car. Taking the car out of a locked garage is also usually considered a breach of the peace. Once the repo man breaches the peace, he loses the right to take your car without a court order. If he still seizes the car, he has wrongfully repossessed it.

If your car or truck has been wrongfully repossessed, you have the right the to sue the lender and repo agent for damages. The damages usually include the cash value of your vehicle. And if the repo man physically assaulted you during the repossession, your damages could be much higher. If you live in Minnesota and have had your car wrongfully repossessed, feel free to contact me for a free case evaluation.

(photo: tpauly)

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Florida lawsuit alleges debt collection harassment contributed to man’s death

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A recently filed lawsuit in Florida alleges that debt collection harassment contributed to a man’s death. According to a Tampa news story, when Stanley McLeod had to quit his job because of a heart attack, he fell behind on his mortgage and other bills. Predictably, McLeod began receiving calls from debt collectors. According to the story, the calls were so frequent and harassing, that McLeod’s blood pressure and stress levels increased dramatically, ultimately contributing to his death. The story quotes McLeod’s wife as saying that there were 10 to 12 calls a day and that the calls upset McLeod so much that he would get very red in the face and short of breath. One of the voice messages left by the debt collector attempted to humiliate McLeod by sarcastically commenting on the emergency helicopter ride that McLeod endured after the heart attack that led to his job loss. According to the story, the message told McLeod to “[g]et your act together and make the payments on your mortgage. Why don’t you have that helicopter pick you up and bring that payment to the office.” McLeod’s wife remarked that “[t]hey humiliated him, they harassed him, and they didn’t care. You know that if things had been handled differently by this company, he may still be here.”

This this type of debt collection harassment is not only illegal under the Fair Debt Collection Practices Act (FDCPA), but it is simply inhumane. Some may argue that McLeod will never be able to prove that the debt collector’s harassment medically contributed to his death. While this may very well be true, it misses the point. No person should ever be harassed and humiliated in this manner simply because they owe a debt. Using this type of extreme harassment and abuse just to collect a few dollars is despicable.

More recordings show pattern of debt collectors making abusive calls (via Consumerist)

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Can a debt collector serve me with a lawsuit by mail?

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I’ve been asked several times recently whether a debt collector can serve someone with a lawsuit by mail. In Minnesota, the answer is yes, but only if you sign a form acknowledging receipt of the lawsuit. Merely mailing you a lawsuit is not valid service. If you don’t sign and return the acknowledgment, there is no service and you are under no obligation to respond to the lawsuit.

Apparently, some debt collectors are mailing lawsuits to consumers as a collection tactic. I imagine the belief is that the consumer will believe they have been served with the lawsuit and, out of fear, immediately call up the debt collector to make payment. If that is, in fact, the intent, I believe the approach is misleading. And depending on how the debt collector’s cover letter is worded, this tactic may be a violation of the Fair Debt Collection Practices Act (FDCPA).

If you receive a debt collection lawsuit in the mail, only sign and return the acknowledgment if you intend to answer the lawsuit within 20 days of the date you sign the acknowledgment. If you sign and return the acknowledgment, but don’t answer the lawsuit, a default judgment will probably be entered against you. If you live in Minnesota and need help responding to a lawsuit, whether served by mail or otherwise, feel free to contact me.

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Debt collectors cannot lie or mislead you when collecting a debt

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The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from lying or misleading you when collecting debts. Probably the most common false or misleading representations made by debt collectors are when they misstate the character, amount, or legal status of a debt.

2695634651_0efbf53c0fExamples of misrepresenting the “character” of a debt include: (1) threatening a lawsuit when the statute of limitations has expired; (2) claiming you owe a debt you are not legally obligated to pay, such as a debt of a deceased relative; and (3) suggesting a debt is due even though it has been discharged in bankruptcy.

Examples of misrepresenting the “amount” of a debt include: (1) failing to give you credit for payments you made; and (2) adding unauthorized charges, such as interest or fees, to the balance of the debt. This  prohibition would also apply to a debt that you’ve already paid in full.

Examples of misrepresenting the “legal status” of a debt include: (1) attempting to collect money on a non-existent judgment; (2) threatening immediate garnishment when judgment has not been taken; and (3) implying that a lawsuit has been filed or served.

In addition to misrepresenting the character, amount, or status of a debt, the FDCPA also specifically defines the following conduct by debt collectors as false and misleading:

  • Telling you that they are an attorney when they are not
  • Implying that you have committed a crime or that you will go to jail if you don’t pay the debt
  • Threatening to garnish your bank account or wages if the debt collector does not intend to do so
  • Implying that documents are legal process, such as a lawsuit, when they are not
  • Suggesting that documents are not legal process or do not require action by you when, in fact, they do

The FDCPA does not limit its definition of false and misleading representations to the conduct described above. It forbids just about any conduct that can be construed as false or misleading. If you live in Minnesota and a debt collector has told you something you believe was false or misleading, fee free to contact me for a free FDCPA case evaluation.

(photo: Joe Penniston)

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