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Although bill collectors can be persistent, many are careful to follow the law when contacting you. Unfortunately, some are not. If a bill collector oversteps the bounds of the law, you can take action.

The Fair Debt Collection Practices Act

The federal Fair Debt Collection Practices Act, or FDCPA, prohibits certain debt collectors from engaging in abusive behavior. It covers debt collectors that work for collection agencies. It does not cover debt collectors that are employed by the original creditor (the business or person who first extended you credit or loaned you money). If a debt collector that works for a collection agency breaks the law, you can take steps to make sure it doesn’t happen again.

It’s illegal for bill collectors to:

  • contact third parties, other than an attorney or a credit bureau, except to locate you
  • call you repeatedly or contact you before at an unreasonable time (the law presumes that before 8 a.m. or after 9 p.m. is unreasonable)
  • contact you at work if your employer prohibits it
  • use or threaten to use violence
  • use obscene or profane language
  • place telephone calls to you without identifying themselves as bill collectors
  • claim you owe more than you do
  • claim to be attorneys
  • claim that you’ll be imprisoned or your property will be seized
  • send you a paper that resembles a legal document
  • add unauthorized interest, fees or charges

Here’s what you can do if a debt collector engages in illegal activity:

1. Tell Them to Stop

Under the FDCPA, you have the right to tell a collection agency employee to stop contacting you. Simply send a letter stating that you want the collection agency to cease all communications with you. All agency employees are then prohibited from contacting you, except to tell you that collection efforts have ended or that the collection agency or original creditor may sue you. You can do this even if the collector is not breaking the law.

2. Document Illegal Behavior

If a debt collector breaks the law, document the violation as soon as it happens. Start a log – and write down what happened, when it happened and who witnessed it. Then, try to have another person present (or on the phone) during all future communications with the collector. In some states, you can record phone conversations without the debt collector’s knowledge. But beware. In a few states this is illegal unless you get permission from the collector or warn him that you are recording the call. Check with your state consumer protection agency to find out if you live in one of these states.

3. File a Complaint

File an official complaint with the Federal Trade Commission (FTC), the federal agency that oversees collection agencies. Ask the FTC to send you a complaint form, or just write a letter. Contact the Federal Trade Commission at 6th and Pennsylvania Ave. NW, Washington, DC 20580, Include the collection agency’s name and address, the name of the collector, the dates and times of the conversations, and the names of any witnesses. Attach copies of all offending materials you received and a copy of any tape you made.

Also, send a copy of your complaint to the state agency that regulates collection agencies for the state where the agency is located. To find the agency, call information in that state’s capital city.

Finally, send a copy to the original creditor and the collection agency. The original creditor may be concerned about its own liability and offer to cancel the debt.

Once your complaint is filed, don’t expect immediate results. The FTC may take steps to sanction the agency if it has other complaints on record. The state agency may move more quickly to sue the collection agency or shut it down for egregious violations. Your best hope is that the creditor will offer to cancel the debt.

4. Sue the Debt Collector

If you’ve been subject to repeated abusive behavior, consider suing the collection agency. But don’t bother if the illegal behavior was annoying but nothing more. For example, if the collector called three times in one day but never again, you probably don’t have a case.

You can represent yourself in small claims court, or hire a lawyer and go to regular court. (The other side may have to pay your attorneys’ fees and court costs if you win.) You’re entitled to any actual losses – for example, your pain and suffering, or the amount you paid to switch to an unlisted number to avoid harassment – and an additional amount (unrelated to actual losses) up to $1,000.

In truly outrageous cases – especially if the abuse inflicted on you was substantial and you have reports from therapists and doctors documenting your suffering – consider hiring a lawyer to represent you.

See also…

Debt Collection