How Consumers Should Handle Illegal and Unethical Debt Collection Situations

Embarrassing calls at work, threats of jail and even violence, improper withdrawals from bank accounts; an increasing number of consumers are complaining of abusive techniques from some debt collectors.

If you are having debt problems, a collector or collection agency may contact you seeking payment. While they have a right to do so, it doesn't mean you have lost your right to be treated fairly. The Fair Debt Collection Practices Act helps consumers fight back against unfair, unethical and illegal debt collection tactics. This includes attorneys who collect debts on a regular basis. Stopping harassment by debt collectors begins with learning about your rights. The Act clearly defines the rules that bill collectors and collection attorneys must obey when collecting debts.

The debt collection industry is one of the most complained-about industries to the Federal Trade Commission (FTC). This is because, despite the Fair Debt Collection Practices Act, most debt collectors know they will get away with their illegal tactics and behavior because; (1) most consumers are uninformed about debt collection laws; (2) it's hard to prove the behavior occurred and its hard to prosecute it; and (3) too many debt collectors are poorly trained and informed and work in an industry with a very high turnover rate.

Debt collectors are not allowed to use the following harassing or abusive tactics:

• Use of or threatening violence or criminal means to harm you;
• Use of obscene or profane language;
• Advertising your debt for sale;
• Telephoning you repeatedly or continuously with the intent to annoy or harass; or
• Placing telephone calls without factual disclosures of their identity

Likewise, debt collectors are not allowed to deceive consumers with the following:

• False representations that they are government representatives;
• Falsely represent that they will seize, garnish or sell any property or wages unless such action is lawful;
• False representations that you have committed a crime or that you will be arrested or imprisoned;
• Threats to communicate false credit information with any other person;
• Falsely implying that the debt collector is employed by a credit bureau;
• False representations implying that they are attorneys or that there is the involvement of an attorney in collecting a debt;
• Falsely indicating the legal status of papers or forms sent to you;
• Use of a false name;
• Misrepresenting the amount of the debt; or
• Send you something resembling an official document from a court or governmental agency when it is not.

Debt Collectors also may not state that:

• You will be arrested if you do not pay your debt.
• They will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so.
• Actions such as a lawsuit will be taken against you, which legally may not be taken, or which they do not intend to take.

Debt Collectors may not:

• Give false credit information about you to anyone.
• Send you anything that looks like an official document from a court or government agency when it is not.
• Use a false name.

If a creditor or collector sends you a legal notice, do not ignore it. Most collection suits and arbitration proceedings against consumers result in default judgments because consumers fail to respond to the legal notices. When they fail to respond, collectors may proceed to request a payment order from the court and, in many states, may seek to garnish wages, even if the debt is not valid. On the other hand, cases are often dismissed when a consumer challenges the validity of the claim.