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One of the worst consequences of being behind on payments is the constant phone calls and harassment from unscrupulous debt collectors. In some cases, these debt collectors break the law and attempt to ruin the lives of borrowers. Some debt collectors act like loan sharks working for an organized crime family and nothing like a professional business or organization.
A recent article published by The Nation went into great detail on how borrowers are affected by debt collectors violating consumer protection laws. In the article, the author discusses how debt collectors call places of employment, threaten arrest and lie to courts to ruin the lives of borrowers. Borrowers can lose their jobs and be subjected to harassing phone calls all hours of the day and night.
Earlier this year, the Consumer Financial Protection Bureau (CFPB) published a list of consumer complaints against debt collectors. Some of the complaints show stories of consumers facing horrible abuse. Fortunately, people affected by illegal debt collection tactics have consumer rights and can fight back.
How Debt Collectors Break the Law
Under the Fair Debt Collection Practices Act (FDCPA), it is illegal for debt collectors to threaten and lie to consumers.
According to the Federal Trade Commission (FTC), debt collectors may not:
- Threaten to use violence or harm the reputation of borrowers. Debt collectors who threaten forceful arrest or call employers with the intention of getting borrowers fired are violating the FDCPA.
- Use profane or abusive language.
- Call repeatedly with the intention of harassing debtors.
- Call after 9:00 PM.
- Lie to borrowers, misrepresent themselves or the debts owed. In recent cases, debt collectors have been caught pretending to be federal law enforcement, attorneys, and others authority figures to coerce borrowers into making payments.
- Continue calling after a borrower has requested to not be called.
How You Can Fight Back Against Illegal Debt Collection Practices
There are dozens more consumer protections people should understand. People who are behind on payments can notify several federal and state agencies when debt collectors break the law.
- Consumers can file complaints with the FTC to report unfair business practices, such as harassment from debt collectors. The FTC is the federal organization responsible for enforcing the FDCPA.
- Complaints can also be filed with the CFPB. The CFPB publishes complaints on its online public database.
- Debt collectors falsely representing themselves as law enforcement officials are committing a felony. As this is a criminal matter, these debt collectors can be reported to law enforcement.
- Complaints can be filed with state Attorneys General, which operate consumer protection divisions.
For people who are buried in debt and see no other way out, a permanent solution for getting rid of debt collectors is to file for bankruptcy. After filing for bankruptcy, all debt collection activities and judgements are ceased through an “automatic stay.” Once the creditor is informed the person has filed bankruptcy, they must stop all phone calls, letters and collection attempts. If a collection agency continues these practice after filing bankruptcy, they can be fined by the bankruptcy court.
If you are in bankruptcy, keep a record of any illegal effort (telephone calls, voice mail or letters) and contact your attorney right away. These actions are violations of the automatic stay and may entitled the debtor to money damages.
Debt collectors are also not allowed to call in regard to debts discharged during bankruptcy. Once the judgment with a legal discharge has been granted by the court, all creditors will receive copies of these documents. Continuing to harass debtors for legally discharged loans can also result in fines and legal penalties.
Have specific questions about debt collection and bankruptcy? The Sader Law Firm servers the greater Kansas City area in both Missouri and Kansas state, and offers free telephone consultations.
