Consumers: be mindful of debt collection abuses

For consumers, dealing with debt can be an extremely stressful task. This is particularly the case when creditors are aggressively pursuing payments. Under both federal and state law, there are protections in place for consumers to address the problem, but sometimes creditors fly under the radar, at least for a time. Debt collection companies are notorious for this.

Last year, a debt collection firm operating in Southern California called Asset and Capital Management Group reached a settlement with the Federal Trade Commission over various violations of debt collection law which affected thousands of consumers. Settlement checks were apparently sent out earlier this month. According to the FTC, the company had falsely threatened consumers with litigation, proper seizure, arrest, and wage garnishment, and illegally disclosed debts to debtors’ family members, employers and coworkers. These sort of thing are all illegal, but all too common.

Consumers, of course, do well to be aware of their rights when it comes to debt collection so that they are aware of when they are being taken advantage of and what their options are in terms of remedying the situation. Taking a general look at the Fair Debt Collection Practices Act, it is clear that debt collectors are prohibited from various forms of harassment, such as using threats of violence or harm, use of profane language, and repeated calls to annoy the debtor.

The law also prohibits creditors from making false statements when attempting to collect debts. This includes things like accusing debtors of committing a crime, lying about the amount of money owed, and falsely claiming they work for a credit reporting company. Unfair practices are also prohibited, such as attempting to collect fees, interest or charges that aren’t actually owed under the contract and depositing post-dated checks early.

Here, of course, we’ve only touched on some of the debt collection practices which are prohibited under the Fair Debt Collection Practices Act. Consumers who feel that they may be experiencing illegal treatment should contact an experienced attorney to make sure their rights are protected.

Source: Federal Trade Commission, “Debt Collection,” Accessed July 17, 2015.