Federal, state, and local government are collaborating to prevent debt collectors from using illegal means to harass consumers as part of Operation Collection Protection (OCP). OCP has conducted 115 actions so far, and has banned 86 debt collection agencies from the industry; some collectors have even been sentenced to time in prison.
In the past, debt collection has been largely unregulated; the result according to debt relief Texas is that debt collectors have employed questionable practices. Intimidation tactics include groundless threats of wage garnishing, arrest, prison, and lawsuits, all which are often made through a barrage of phone calls. More troubling, some collectors have been accused of pursuing debts that people don’t actually owe.
Debt collectors have also been known to ignore state and local licensing requirements, particularly neglecting to give the people they pursue the legally required notification of the amount owed. This Wild West lawlessness makes it tough, both for consumers and legitimate creditors, who operate legally to collect actual debt.
One company called BAM Financial (BAM) even went so far as to impersonate attorneys or process servers, report debt amounts to third parties, and at times, not disclose themselves as debt collectors. In one instance, BAM informed a mother she would not be able to see her children; in another, the company notified a person’s octogenarian mother that her daughter would be arrested.
Another company called Delaware Solutions knowingly tried to collect on non-existent debts. When the company encountered resistance from the consumer, common tactics used to instill fear included informing third parties about the debt to embarrass the consumer, or threatening lawsuits or imprisonment.
Predatory debt collectors’ tactics often result in humiliation, harassment, and payment for un-owed debts, as many people are coaxed under false circumstances or capitulate to stop the harassment. This doesn’t have to be the case, because consumers have rights that debt collectors must respect.
The Consumer Financial Protection Bureau (CFPB), together with the Federal Trade Commission (FTC), provides some helpful guidelines about consumer rights with debt collectors.
What Debt Collectors Cannot Do
• Call you before 8am or after 9pm.
• Keep contacting you after you’ve sent a written request asking them to stop.
• Call your workplace if your employer doesn’t allow it.
• Pretend to be a lawyer or a government agent.
• Send documents resembling court or government documents when they are not.
• Threaten, harass, or deceive you.
• Discuss your debt with anyone other than you, your attorney, and your spouse.
• Collect any interest, fee, or extra charge on top of the amount you owe.
• Threaten to take your property unless it can be done legally.
• Apply payment to a debt you don’t think you owe.
What Debt Collectors Must Do
• Inform you that they are a debt collector
• Tell you how much you owe (and to whom) no later than 5 days after initial contact.
Many times debtors will threaten wage garnishment. You should know that certain federal benefits cannot be touched. Those are:
• Social Security Benefits
• Supplemental Security Income (SSI) Benefits
• Veterans’ Benefits
• Civil Service and Federal Retirement and Disability Benefits
• Military Annuities and Survivors’ Benefits
• Federal Emergency Management Agency Federal Disaster Assistance (FEMA)
If you have been harassed, you can sue the collector in state or federal court up to a year after the violation occurred. If the judge rules in your favor, the debt collector can be ordered to pay any damages suffered, including lost wages, medical bills, and attorney’s fees. It is important to remember that in the event of a lawsuit, the debt, if it is yours, will still be owed.
If an attorney is representing you, the debt collector must contact the attorney and not you directly. For more information, visit the Federal Trade Commission’s debt collection page.
If creditors are harassing you or violating your rights, you have the right to tell them to stop! Call Attorney Persad at CPLS, P.A at 407-647-7887 or visit Credit Counseling to find out how you can protect yourself.