I’ve written a great deal (for example: see this post, this post, and this post) about what specific debt collector conduct violates the Fair Debt Collection Practices Act. But the easiest way, perhaps, to figure out whether a debt collector has run afoul of the FDCPA is to think about the Act more broadly.
Without getting into specifics, the FDPCA prohibits debt collectors from doing anything that is (1) unfair; (2) untrue; or (3) harassing or abusive. Obviously, the Act lists a number of specific debt collection tactics that fall into these three categories. But the FDCPA also makes it very clear that any debt collection conduct–whether specifically listed in the Act or not–that is unfair, untrue, or harassing and abusive is a FDCPA violation.
So rather than poring over the text of the FDCPA or reading dozens of articles on the internet, just ask yourself this question: did the collector do something that was unfair; untrue; or harassing or abusive? If your answer to this simple question is yes, there’s a good chance that the debt collector violated the FDCPA and your next move should be to contact a consumer rights lawyer.
If you’re dealing with debt collectors, make sure to download and use my free debt collection call log so that you can document all of the debt collectors’ communications. And if a debt collector does anything that you think was unfair; untrue; or harassing or abusive, please contact me to discuss the situation further. I offer a free case review for all FDCPA cases and if I agree to handle your case, you won’t have to pay me any money up front. My fees come from the money I recover from you if you win your case or accept a negotiated settlement.
Last December, I posted about a Florida woman who sued a debt collector for contacting her family on Facebook. It turns out that the judge agreed with her and ruled last month that the debt collector could no longer contact her–or her family and friends–on Facebook or any other social-networking site. Click below for all of the details.
Debt collectors must tread lightly on social media | Orlando Sentinel | April 17, 2011 (via Consumerist)
Federal Judge allows a RICO case against debt collector, debt buyer, and process server to proceed
January 13, 2011 by Todd Murray · Leave a Comment
The Racketeer Influenced Corrupt Organization act–or RICO–is a federal law most famously used to prosecute members of the Mafia and other organized crime groups. But a judge in the Southern District of New York recently allowed a consumer-class action lawsuit, based in part on RICO claims, to proceed against a debt collection law firm, its debt buyer client, and a process serving company.
According to this Daily Finance story, the lawsuit alleges that the defendants’ business model is as follows: (1) buy debt with little documentation that the debt is accurate; (2) file lawsuits claiming personal knowledge of the debt but using robo-signed affidavits instead; (3) deliberately fail to tell the “debtor” that the lawsuit is pending (a practice called “sewer service”); (4) get a “default” judgment against the debtor when she fails to show up in court to defend herself; and (5) enforce the judgment, including by freezing the debtor’s bank account.
Points 1, 2, 4, and 5 are the basic formula used by debt buyers and their attorneys across the country. Where this case differs is the added allegation of an organized “sewer service” scheme. In his ruling, Judge Denny Chin ruled that there was enough evidence that the three defendants colluded to effect sewer service on unsuspecting consumers to bring the defendants under the RICO definition of a criminal enterprise.
A Lawsuit That Dirty Debt Collectors Should Be Worried About | Daily Finance | 1/4/11 (via Consumerist)
New Mexico now requires debt collectors to tell consumers that the statute of limitations has passed
December 21, 2010 by Todd Murray · Leave a Comment
A recently-passed New Mexico law requires debt collectors to tell consumers when the debt they are collecting is past the statute of limitations. The statute of limitations, of course, is the time limit for bringing in a lawsuit. In Minnesota, for example, most collection lawsuits must be brought within 6 years of the date the consumer defaulted on the account.
There is nothing to stop a debt collector from attempting to collect a debt that is past the statute of limitations, they just can’t resort to a lawsuit if their voluntary collection efforts fail. If they do, they’ve violated the Fair Debt Collection Practices Act and can be sued. But it’s not uncommon for debt collectors to imply, or outright mislead, people into believing that they can still be sued even though the debt collector knows the SOL has passed. They get away with this because many consumers either don’t know what the statute of limitations is, or don’t know how long it is in their state. With its new law, New Mexico became the first state to level the playing field created by this knowledge imbalance. It would be great if other states, including Minnesota, follow New Mexico’s lead.
New Rule Requires that Collectors Disclose that a Debt is Time-Barred | Credit Slips | December 17, 2010
Investigation reveals troubling problems with Minnesota’s debt collector licensing process
December 16, 2010 by Todd Murray · Leave a Comment
The results of a Minneapolis Star Tribune investigation suggests that Minnesota’s procedure for registering debt collectors is broken. Under Minnesota law, individual debt collectors are required to register with the state and obtain a license. And if a person has been convicted of “fraud or any felony,” they are supposed to be prohibited from obtaining a license and working as a debt collector. The reasoning behind this law is fairly obvious: debt collectors have easy access to hundreds, or even thousands, of social security numbers and bank and credit card account numbers, which makes stealing someone’s identity a pretty tempting, and easy, thing to do.
But the Star Tribune’s investigation revealed that since 2005, the state has registered 111 people as debt collectors that should have been barred because of prior fraud or felony offenses. The Star Trib also found that approximately 75% of people that applied for a debt collection license lied about their criminal background. Although many of these people’s crimes would not have barred them from working in collections, it’s still very troubling that the state’s failure to conduct routine background checks before issuing a license is encouraging chronic lying on the license applications. Perhaps even more troubling is the fact that many collection agencies don’t conduct criminal background checks before hiring, apparently because they incorrectly believe that the state is doing it for them.
The story details a number of anecdotes about collectors being licensed that had previously been convicted of widespread financial fraud and violent crimes such as assault, battery, and even rape. It should be no surprise when these convicted felons, after getting jobs in collections, resort to harassing and abusing debtors.
So what is the solution here? Allocating more state money and resources for comprehensive background checks is an unrealistic option with the massive state budget deficit. One suggestion, made by state Senator Ron Latz, DFL-St. Louis Park, is to allow consumers to file state lawsuits and seek damages when collection firms hire criminals who harass them. “The only language that corporations speak is financial,” Latz said. “Either they pay for their negligence, or nothing changes.”
Criminals land jobs as debt collectors | Star Tribune | December 14, 2010