Debt Collection Video #5
What Debt Collectors Can And Cannot Do
Hi. I am Nevada Licensed Debt Adjuster Damian Falcone. This video will be the first in a series about consumer debt collection. In this series we will discuss what debt collectors can and cannot do, your rights when dealing with debt collectors, and what to do when collectors engage in illegal practices.
Consumer debt collection is governed by a federal law called the Fair Debt Collection Practices Act, or FDCPA. The purpose of the FDCPA law is to eliminate abusive debt collection activities.
First, lets talk about who is governed by the law. The FDCPA laws only apply to debt collectors, and Not original creditors. So, for example, if the bank where you originally obtained a loan is attempting to collect on its own debt, this information does not apply. But, if the debt has been turned over to a debt Collection agency or a Law firm, they are bound by the rules we will be discussing in this series.
We have interviewed a former debt collection agent that has asked that we conceal his identity – John S was a Debt Collection Agent in the state of NY. As a Debt collection agent John S had a different view of these nationwide laws and has agreed to tell us about his experiences and behavior.
John S: “in offices I worked we were able to get better results based on how much we were able to disrupt peoples’ lifestyles.”
The FDCPA Laws prohibit numerous abusive and deceptive tactics when attempting to collect a debt. For example, although a debt collector can make phone calls to you, they cannot call you at unreasonable hours. Generally that means that they cannot call you before 8:00 am or after 9:00 pm.
John S: Calling outside the legal hours was very effective. I would tell people I was in a different time zone and they would never follow up or they didn’t know it went by the time zone of their present mailing address.
Debt Collection agents are also prohibited from making calls to your place of employment if they have been told that you can’t take calls at work.
John S: This was great because most people were so embarrassed they couldn’t deal with it and would agree to anything and then we could call back again;
In addition, debt collectors must not call you if you are represented by an attorney or if you have asked in writing for the calls to stop. For documentation purposes, I provide a checklist in an upcoming episode of things to look out for.
John S: We didn’t play with attorneys bc attorneys don’t like to play. And that could be your job.
Even when a debt collection agent is allowed to call you, there are several things that they cannot do in the process of the telephone conversation. In general, collectors are prohibited from using harassment or abuse. This means that they cannot threaten you with violence, use obscene or profane language, threaten to report you to any governmental agency, or threaten arrest or a lawsuit if it is not actually contemplated and legal to do so. Debt collectors also cannot contact your employer or most other third parties about your debt.
John S: Whatever it takes to rattle somebody is what got me paid. I found it particularly effective to threaten legal consequences – Most people think John S(bleep) is an attorney. HAHA
In addition to mapping out the prohibited practices that we have talked about, the FDCPA laws also state numerous things that debt collectors are required to do. At the outset of the collection efforts, a collector must send you a letter notifying you that you have 30 days in which to dispute the debt. If you dispute the debt within this time period, they must cease all collection efforts until the details of the debt are verified. In an episode to follow I show you how to write a standard dispute letter.
John S: if people disputed debts and it wasn’t certified mail it went right in the trash (?… if it was certified we sold it?) In addition, they must identify themselves in every communication and let you know that any information that they obtain from you will be used in their collection efforts.
John S: I could say anything and it rarely came back to bite me – unless someone ?kept notes/checklist…?
If their attempts to collect fail and no debt settlement is reached, a creditor can file a lawsuit against you either in the place where you live or the place where the contract was signed. I will show you what a filing looks like and what you will need to do in response.
John S: ??... my experience with lawsuits…?
So, lets review. Federal law allows debt collection agents to contact you, but has provisions in place to stop abuse and harassment. The more you know about these prohibited activities, the more success you can have in negotiating with collectors to resolve your outstanding debts.
In our next video we will discuss your rights when dealing with debt collectors and how knowing the FDCPA laws can put you in a better position to get your debt resolved even in a loan modification.
See our full set of videos on debt collection.