Debt Collector Harassment
What Constitutes Illegal Debt Collection Activity?
Oct 16, 2009 Candice Gillingwater
It is the job of collection agencies and third part debt collectors to collect on defaulted consumer debts. The Fair Debt Collection Practices Act (FDCPA) was put in place to regulate the debt collection methods used by these companies.
How Collection Agencies Acquire Debt
Unsecured debts, such as credit card debt and medical debt, are the debts most often sold to collection agencies. Because these debts are not secured by personal property, the creditor does not have the option to legally place a claim on anything the debtor owns to satisfy the debt. After a certain amount of time passes without the creditor receiving payment (usually 180 days) the debt will be charged off and sold. This allows the creditor to claim the debt as a tax loss.
A collection agency will purchase a debt from a creditor after the debt is charged off for pennies on the dollar. It will then make an effort to collect the full amount owed. Usually fees will also be added. If a collection agency is unsuccessful in collecting a debt, the debt will be sold to yet another collection agency.
Provisions of The Fair Debt Collection Practices Act
The FDCPA is a set of guidelines set forth by the federal government to prevent illegal collection activity and protect the rights of consumers. Some of the provisions of the FDCPA are as follows:
- Calls from collection agencies are only allowed between the hours of 8 a.m. and 9 p.m. in the consumer’s time zone.
- A debt collector may not call a debtor repeatedly with the intent to harass him or her.
- Grants consumers the right to dispute any debt with a collection agency and request full validation at any time.
- Prohibits threats and harassment of any kind from debt collectors.
- Prohibits communication of a debt to any third party.
- Allows consumers to request in writing that telephone calls or written communication from a debt collector cease.
- Prohibits continued collection activity once a dispute is filed until a debt is validated.
- Prohibits debt collectors from misrepresenting themselves in order to collect a debt.
Consumer Rights Regarding Illegal Debt Collection
Illegal debt collection is defined as any collection activity that violates FDCPA guidelines. If a collection agency engages in illegal debt collection, a consumer has the legal right to file a lawsuit against the collection agency. The lawsuit may be in the amount of any damages the consumer has suffered due to the collection agency’s noncompliance. One example of this would be a consumer who requests a debt validation and never receives one, yet the collection agency continues to update the debt on the consumer’s credit report. If the individual is then turned down for credit on account of the negative trade line, he or she may sue for damages.
A consumer may also opt to sue a collection agency for punitive damages, but the FDCPA limits punitive damages for illegal collection activity to $1000- regardless of how many violations have occurred. In court, an individual must be able to prove that the FDCPA laws were violated by the debt collector.
An individual may also opt to report illegal collection activity to the Attorney General in his or her state and the Federal Trade Commission.
A Consumer May Sue Over Illegal Debt Collection
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