New Law Seeks to Stop Harassment from Government Debt Collectors

Posted on February 15, 2016 at 12:00pm by
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Carrying past due debts can have many consequences, but one of the worst is the non-stop phone calls from debt collectors. People with past due debts may begin to recoil in horror every time the phone rings.

Borrowers in the US are protected by the Fair Debt Collection Practices Act (FDCPA), which governs how collection agencies can interact with people who owe past due consumer debts. However, the protections under the FDCPA are not perfect, and some lawmakers are seeking changes.

Debt collectors working on behalf of federal agencies, such as the IRS, will exploit legal loopholes and bypass some of the restrictions found in the FDCPA. Past due taxes, parking tickets and other government debts are not considered ‘consumer debts’, meaning it is much more difficult to enforce protections found under the FDCPA.

To help prevent harassment from debt collectors contracted by the federal government, two U.S. Senators have introduced the Stop Debt Collection Abuse Act of 2015. This legislation would put all federal government debts under the protection of the FDCPA. Unfortunately, the bill would not cover debts from state agencies.

Why We Need Protections Against Government Debt Collectors

To illustrate the importance of the FDCPA, let’s take a look at how government debt collectors abuse consumers. Linebarger Goggan Blair & Sampson (LGBS), a private debt collector working on behalf of 21 state governments, has received negative press attention for its harsh collection tactics.

LGBS acts as if it is above the law because it does not have to follow all of the rules outlined in the FDCPA. In states that allow it, LGBS is free to add fees that total 30 to 40 percent of the original balance of debts. It has also been accused of threatening debtors with arrest. LGBS has been sued multiple times in several different states. One of its executives was even sent to prison, yet it remains unscathed.

If the Stop Debt Collection Abuse Act of 2015 became law, collection agencies working on behalf of the federal government would no longer be able to harass borrowers. This includes student loan borrowers and people who owe the IRS. However, if this law fails to pass, filing for bankruptcy is still a great way to get debt collectors to shut up and stop calling.



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