UNDERSTAND YOUR RIGHTS AGAINST DEBT COLLECTORS

By: Lance T. Denha, Esq.

Have you or someone you know ever been battered by non-stop, harassing calls? Do you avoid picking up the phone because you feel that doing so may make the creditor simply go away? As you will soon learn, this is not the best approach to take in dealing with these calls. Consumers believe they cannot control the manner in which these calls continue. Some may be fearful or reluctant to take a debt collector’s call, or read letters about credit card debts they owe, and simply do not know what to do next. This article is intended to help a consumer understand their rights associated with these matters.

What is a debt collector, one might ask? Debt Collectors are essentially companies in the business of recovering money that is owed on delinquent accounts. Some debt collectors purchase debt from financial institutions. These debt buyers own the debt and own the right to attempt to collect the full amount of the outstanding credit card debt.

Here are a few items to note in dealing with debt collectors: When first contacting consumers, debt collectors must inform debtors of their rights to dispute the debt. The debt collector must tell the debtor: 1) the amount of the debt; 2) the name of the creditor; 3) the fact that unless the consumer disputes the validity of the debt within 30 days, the debt will be considered valid; and 4) that the consumer can ask for verification of the debt.

According to the law, this information can either be given over the phone or must be sent to consumers in writing within five days of the first telephone contact. Consumers contacted by debt collection agencies can request written verification or proof of their debts — but they must do so in writing with a verification letter required to be sent within 30 days of the initial contact from the collector. Debt collectors must provide verification of the debt in order to help the debtor better understand the terms of the debt.

Consumers should understand and be aware that the Federal Trade Commission (FTC) enforces the credit laws that protect your right to get, use, and maintain credit. These laws do not guarantee that everyone will receive credit. Instead, the credit laws protect one’s rights by requiring businesses to give all consumers a fair and equal opportunity to get credit and to resolve disputes over credit errors. In addition, the following Acts further govern the manner in which collection agencies conduct their practice:

• The Fair Credit Reporting Act (FCRA) promotes the accuracy and privacy of information in the files of the nation’s credit reporting companies. This law governs companies to report information in the files and requires the accurate reporting of negative information. Violations of this Act also enable consumers to sue for actual damages.

• The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination on the basis of sex, race, marital status, religion, national origin, age, or receipt of public assistance. Creditors may ask for this information (except religion) in certain situations, but they may not use it to discriminate against you when deciding whether to grant you credit. This law applies to any person who, in the ordinary course of business, regularly participates in a credit decision including banks, realtors, bank card companies, finance companies and credit unions. Failure to comply with this Act can subject a financial institution to civil liability for actual and punitive damages.

• The Fair Debt Collection Practices Act (FDCPA) is a federal law created to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and provide consumers with an avenue for disputing and obtaining validation of that information in order to ensure the information and accuracy. This Act applies to personal, family, and household debts. Under the Fair Debt Collection Practices Act:

 Debt collectors may contact you only between 8 a.m. and 9 p.m.

 Debt collectors may not contact you at work if they know your employer disapproves.

 Debt collectors may not harass, oppress, or abuse you.

 Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.

 Debt collectors must identify themselves to you on the phone.

Consumers should understand that the debts they have are considered private information. The law protects that privacy by making it illegal for debt collectors to disclose the existence of debts to anyone other than authorized individuals (such as an attorney representing the debtor) or a spouse who is also responsible for the debt. Consumer advocates recommend keeping copies of all written correspondence to and from debt collectors as well as sending any letters via certified U.S. Mail. Some recommend getting a return receipt as well. Others advise keeping a log or journal of the day and time of calls, especially if there are multiple debts and multiple debt collectors calling.