Since ancient times, tax and debt collectors have been portrayed as villains. They strike fear in the hearts of debtors and their families. Today, the backdrop has changed due to new technology, but often the result is the same.
Families frightened by threats and abusive language that debt collectors unleash on them respond because they don't know the way debt collectors should work. Fortunately, the Federal Trade Commission (FTC) is going to battle on your behalf. They recently scored major victories against unsavory debt collectors.
The Fair Debt Collection Practices Act
Thirty years ago, Congress enacted an important law known as the "Fair Debt Collection Practices Act" (Act). It's enforced by the FTC, and consumers can also bring private lawsuits against debt collectors who violate it.
This law is very specific about what debt collectors can and can't say and do. The FTC gives a helpful description of consumer rights, and also includes a video. It also gives step-by-step instructions in English and Spanish on how to file a consumer complaint.
Cases & Companies to Watch For
Academy Collection Service
Academy Collection Service, a Pennsylvania company, and its owner paid $2.24 million to settle charges that it violated the Act. This is the largest penalty ever imposed on a debt collection company. The FTC charged the company with many violations, including unauthorized withdrawals from bank accounts, and frequent and harassing phone calls.
It wasn't just the company paying. Two managers in charge of Academy Collection's Las Vegas operation were ordered to pay $375,000 and $300,000. However, their payment was reduced to $7,500 each. If they've lied about their finances, they'll have to pay the rest in full immediately.
Cash Today & Leads Global
The FTC also settled for $1 million with an international internet payday lender, having several operations based in the U.K., including Cash Today and Leads Global. It claimed the company made false threats of prison or arrest, used abusive and profane language when calling, didn't disclose the terms of loans, and misled consumers saying they were based in Nevada.
The collection agencies and their owners and managers didn't admit they had violated any law by agreeing to the terms of the settlements. The FTC filed the agreements, in the form of "consent decrees," with federal courts, and the courts will review them. They will be final and binding only once signed by the judge.
Don't Be a Victim
If you're in debt, you have the right to be free from unfair treatment by collectors. It's illegal for a collector to contact you at unreasonable times or places, and they can't contact you at work if you inform them that your employer doesn't allow it.
When you have a lawyer, the debt collector must communicate with your lawyer, not with you. The collector can't harass, oppress or abuse you or others whom they contact about you, such as family members, employers and friends. They also can't mislead you or lie.
Be sure to keep written notes about any communications, and keep a copy of any correspondence. Just because you may be in debt doesn't mean you should be harassed or threatened.
Questions for Your Attorney
- How much will you charge to represent me against a debt collector?
- Can I sue the debt collector myself, or do I have to go through the FTC?