According to PEW Trusts, debt collection agency claims accounted for 9 out of 12 civil cases. While these numbers are eye-opening, we also know that many debt collection agency operations who take legal action against the original creditor are debt buyers.
They use many different debt collection methods to try to collect on delinquent accounts. However, whether the debt is owed to the original creditor, a business owner, or to a debt collection agency, the Federal Debt Collection Practices Act (FDPCA) explains what measures may and may not be taken to collect on delinquent accounts.
The Fair Debt Collection Practices Act was enacted by the FTC in 1977 as a measure to stop the abusive practices of both original creditors and debt collection agencies. Unfortunately, even though many debt collection agencies know about the existence of the FDCPA and what they should not do, it doesn't always stop them from using illegal measures while attempting to collect on delinquent collection accounts. They make the assumption that debtors don't know the law, and they engage in abusive practices. Some collection agencies simply don't know the law. If they violate the law, you can report the collection agency to the FTC and the state's Attorney General. The debt collection agency could lose their license, be subject to financial penalties, or you may be able to file a lawsuit against them.
If you owe money on your credit cards or have other delinquent accounts, it is important that you understand the 6 things that a debt collection agency cannot do without violating the FDCPA.
1. Make Phone Calls at Unreasonable Hours
A debt collection agency making phone calls to collect on money owed must not call you during unreasonable hours. Unless you give the debt collector specific permission, they may not call you outside of the hours of 8:00 am to 9:00 pm. These are the hours for your time zone, not the time zone for the debt collector. It does not matter if the debt collector makes phone calls from a time zone that is three hours ahead of you. If it is 9:00 am where they are and they wake you up at 6:00 am, they may be violating federal law. The Consumer Financial Protection Bureau states on its website that the best course of action is to write a letter telling the debt collector to cease contact. They also state that you should keep a copy of the letter for your records.
2. Use Profane or Obscene Language
During phone calls to collect a debt, a debt collector may not use profane or obscene language with you. This includes cursing at you, yelling at you, or threatening you. This includes leaving threatening voicemails. If the original creditor or a debt collector is verbally abusing you while trying to collect on a delinquent account, and you live in Oklahoma, creating evidence of their violating of the FDCPA can be fairly simple. Oklahoma is considered a one-party recording state.
You can record your phone calls without informing the debt collection agency or the original creditor.
3. Threaten to Have You Arrested Over Delinquent Accounts
The FDCPA makes it illegal for a debt collector to threaten to have you arrested over delinquent accounts. The general threat from the debt collector is that you have committed a crime by having delinquent accounts and that they will have you arrested. This simply isn't true. Delinquent accounts, such as credit cards and medical debts, are civil matters, not criminal matters. They are heard in civil court. You will not be arrested for a civil matter. We do not have a debtor's prison.
If you receive phone calls of this nature, remember that Oklahoma is a one-party recording state. Record the calls so that you have evidence of the threats. You may be able to use them to report the debt collection agency.
The Consumer Financial Protection Bureau suggests that if you receive a notice from a court about a debt collector who received a judgment against you and the notice states you need to appear in court, ignoring it is never a good idea. Although the civil court may not result in a warrant for your arrest, it could still result in other issues such as wage garnishment.
4. Give Information About Your Delinquent Accounts to Third Parties
Information about your delinquent accounts can only be discussed with certain people:
They cannot give information about your delinquent accounts or discuss your delinquent accounts with third parties. However, they can contact third parties to confirm certain information about you. The information they are looking to confirm is used to contact you about the money owed. The type of information they are generally allowed to confirm includes:
Your phone number
Your employer’s information.
Debt collectors are not allowed to embarrass you by telling third parties, such as your friends and family members, that you have delinquent accounts. If they do, they could be violating federal law. They also are not entitled to your bank account information.
5. Call You at Work After Telling Them Not to Do So
If you're not allowed to receive personal phone calls at work and you've told the debt collector not to call you at work because it violates workplace policy, they are not allowed to call you at work. Debt collectors may try to convince you that collection phone calls are not personal matters. They may even state they are calling about a "business matter." Yet, they are personal matters. They relate to your personal affairs. Because of this, if it is the policy of your workplace to not allow personal phone calls then a debt collector who calls you when you are at work may be violating the Fair Debt Collections Practices Act.
6. Not Validate the Debt Owed
If requested by you over the phone or by letter, the original creditor or the debt collection agency has a legal obligation to validate the debt they allege that you owe. They must do this within 30 days. The debt validation letter must contain certain information:
The alleged amount of money owed by you
To whom you allegedly owe the debt
How you may pay the alleged debt
A statement to you that if you notify the debt collector in writing within a 30 day period that the debt or any portion of it is disputed, the debt collector will obtain verification or a copy of the judgment against you and that a copy of the documentation will be mailed to you
A statement that the debt collector will provide you with the name and address of the original creditor if it is different from the debt collector.
If the original creditor or debt collection agency fails or refuses to provide the debt validation letter, you should then contact a consumer protection attorney.
Debt collectors might stress you claiming a deadline of 180 days, but in fact Oklahoma has a 5-year statute of limitations on most debts.
Are Debt Collection Agencies Actually Punished?
Many debt collection agencies are law firms or work closely with law firms. You may wonder if they are actually punished. The answer is yes. In January 2017, the Consumer Financial Protection Bureau took action against two law firms providing debt collection services. Both provide medical debt collection services. According to the Consumer Financial Protection Bureau, the law firms and their president were ordered to repay a total of $577,135 to consumers.
This came to happen all on the basis of consumer complaints. Works & Lentz Inc., and Works & Lentz of Tulsa Inc., have offices both in Tulsa and Oklahoma City. The complaints included:
Debt collectors claimed to be attorneys when making phone calls and sending letters even when no attorney had reviewed delinquent accounts
Inaccurate credit reporting by the debt collectors
Neither company nor the president admitted to breaking the law or any other wrongdoing. A consent decree with the Consumer Financial Protection Bureau was entered into between the parties. It included a civil penalty of $78,000 and more than $577,000 in the form of consumer refunds.
Recently, the Consumer Financial Protection Bureau partnered with the FTC, federal law enforcement, and state law enforcement to stop abusive debt collection practices. They are calling their partnership Operation Corrupt Collector. Although this effort does not specifically target Oklahoma, it does highlight the importance of protecting yourself against abusive debt collection practices. The CFPB encourages debtors who are being intimidated and abused by original creditors or debt collection agencies to understand their rights and protect themselves.
Protect Yourself from Debt Collectors
Some debt collectors do follow the law, but many don't. It is important to understand how to protect yourself from debt collectors as well as what your rights are if you have credit problems. The Law Offices of B. David Sisson can help you understand your rights and explain your potential legal remedies if you're being harassed or abused by a debt collection agency. To learn more about debt collection laws or what options you might have because you are being harassed by phone calls from debt collectors, contact the Law Offices of B. David Sisson to schedule your free consultation.