Posts Tagged: ‘Fair Debt Collection Practices Act’

How Debt Collectors Trick Consumers into Reviving Old Debts

August 8, 2019 Posted by kingcade

Creditors can be extremely creative when attempting to collect on a debt. Many of them rely on the fact that most consumers do not truly understand the laws surrounding debt collection. The average consumer may not know creditors only have so long to collect on a debt under the state’s statute of limitations. After that time has passed, the creditor or debt collector is barred from taking legal action to collect on the debt.  But that does not mean they can’t stop trying to collect on it.

The problem is many debt collectors will still attempt to get payment on the debt, even after it is past the legal statute of limitations. This practice is often referred to as “zombie debt collection.” Their hope is that the consumer will pay on the bill, even just a partial amount, reviving the debt, and then giving the debt collector the legal right to sue to collect on the remaining debt.

It is important that consumers be aware of what the statute of limitations is for their given state. In Florida, debt collectors may not collect on a debt that is more than five years past due for written contracts, such as personal loans. For other debts, including those with revolving accounts, such as credit cards, the statute of limitations is four years.

It is estimated that consumer debt has reached a record level of more than $4 trillion owed. As a result, the debt collection industry is upping their efforts to make profits from debts that were once considered written off and essentially not collectible, including debts that are past the statute of limitations.

Debt collectors are using different tactics to get consumers to reset the statute of limitations. Some have sent credit cards to the account holders that let them pay off the old debts by using the card, or they allow the consumer to make a smaller payment to stop the collection calls. If the consumer is not otherwise aware of the fact that he or she has rights under the Fair Debt Collection Practices Act (FDCPA) to demand that the calls stop, he or she may believe payment is the only option to end the harassment, which is not the case.

This new push to try to collect on old debts is having an adverse effect on the court system with an increase in the number of debt collection lawsuits being filed. In New York City, it was reported that the number of debt collection lawsuits has drastically increased to more than 100,000, as compared to the 47,000 filed in 2016.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Source: https://www.washingtonpost.com/business/2019/08/07/zombie-debt-how-collectors-trick-consumers-into-reviving-dead-debts/?noredirect=on

 

 

The Biggest Violations Made by Debt Collectors

July 25, 2019 Posted by kingcade

Debt collectors can be persistent to the point of becoming threatening or intimidating. However, this does not mean consumers are without rights. The Fair Debt Collection Practices Act (FDCPA) protects consumers from unfair debt collection practices by third-party debt collectors. The law provides when debt collectors can contact individuals, what information they can provide to third parties, and other protections.

In 2018, the Federal Trade Commission received a total of 84,500 complaints regarding debt collectors. The following violations are the most common offenses made by debt collectors.

  1. Failure to Provide Written Verification of the Debt.

Any person who is contacted regarding a debt has the right to get written verification of the amount owed. Under the FDCPA, the debt collector must send written verification of the debt within five days after making initial contact. In that communication, the debt collector needs to provide the amount owed, the name of the original creditor, and information regarding how the individual can dispute the debt. However, many debt collectors fail to follow through on this requirement. Alternatively, many consumers are not aware they have the right to request this information.

  1. The Debt Was Never Actually Owed.

One point of requesting written verification is to determine whether the debt belongs to that individual. If the consumer believes the debt does not belong to him or her, that person can request in writing within 30 days of initial contact with the debt collector that he or she wants verification of the debt.  Many debt collectors are banking on the fact that the consumer is not aware that he or she can dispute the validity of the debt in the event it is not owed.

  1. Harassing Tactics.

Some of the most common complaints have to do with the communication tactics used by debt collectors. Under the FDCPA, collectors cannot call repeatedly to get someone to pay on a debt. Debt collectors are prohibited from calling before 8 a.m. or after 9 p.m., or at other times if it is inconvenient and the consumer tells the collector to stop calling.

  1. Threats and Abusive Communication.

Many violations have to do with other types of methods debt collectors use to scare consumers into cooperating. These methods normally involve threats or abusive language with the sole purpose of intimidating the person on the other end of the phone. However, this type of communication is illegal under the FDCPA, and a consumer is within his or her rights to file a violation in the event a debt collector uses such tactics.

  1. False Statements or Misrepresentations.

Collectors have also been known to threaten a lawsuit or criminal prosecution if the consumer does not cooperate. However, collectors cannot threaten a lawsuit, prosecution, wage garnishment, jail time or harm to the person’s credit score unless they have the legal authority to do this and fully intend to do the same. Otherwise, the threats are illegal under the FDCPA.

  1. Sharing Information with Third Parties.

Under the FDCPA, debt collectors can share very limited information when speaking to individuals connected to the original debtor, including that person’s family members, friends, neighbors or co-workers. If they do speak with any of these individuals, they cannot reveal that a debt is owed, and they are limited on how many times they can call those connected to the consumer who owes the debt. Essentially, the only information they can gather from these types of people is how to get a hold of the person who owes the debt. Many debt collectors have been known to do more than this or at least push the envelope, which results in FDCPA violations.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Source: https://www.marketwatch.com/story/these-are-the-biggest-complaints-about-debt-collectors-2019-07-11

 

 

What You Can Do if a Creditor Is Harassing You

June 14, 2019 Posted by kingcade

The business of debt collection can be intense and stressful for the person on the receiving end of the call. Debt collectors can be relentless and will stop at nothing to reach the person owing the debt. However, consumers do have rights, and it is important that they be aware of what those rights are in the event they are on the receiving end of creditor harassment.

Fair Debt Collection Practices Act

Consumers are protected from abusive and unfair debt collection practices through the Fair Debt Collection Practices Act (FDCPA). The FDCPA provides rules that third-party debt collectors must follow when they contact consumers to collect upon the debt.

The following acts are specifically prohibited under the FDCPA:

  • Repetitive phone calls from the debt collector with the intent to annoy, harass or abuse the person answering the phone;
  • Using profane or obscene language when communicating to collect the debt;
  • Threatening physical violence against the person answering the phone;
  • Using deception or misleading collection practices, including lying about how much is owed and that the person calling is an attorney when he or she is not; and
  • Making any threats to do something that either the debt collector has no intention of doing or does not have the legal right to do.

The consumer has the right to send a letter to the debt collector informing them that they must cease and desist communication with the consumer due to their violations of the FDCPA.

Depending on how extensive the abusive tactics and harassment are, the consumer can sue the debt collector under the FDCPA. This lawsuit can include damages, as well as the consumer’s attorney’s fees for having to file the case. Damages can be even more extensive if the debt collector ignores the consumer’s written cease and desist letter and continues the abusive tactics.

Tactics to Keep in Mind

Keep in mind that these debt collectors are highly skilled at antagonizing the person on the other end of the phone. Do not fall prey to their tactics of intimidation and fear. They usually record these conversations in hopes that they can get the person to say something that will incriminate them or tie them to the debt. Whatever you do, stay calm but firm, and keep the communication brief.

It helps to keep records of these conversations and contacts in the event the consumer does wish to file an FDCPA claim. The more letters, text messages, emails and phone calls that are made and recorded, the stronger the consumer’s case will be. When talking with a collector, be sure to get that person’s name, the name of the company for whom he or she works, and a call back number.

One recommendation that could also help the consumer’s case is to ask for written verification of the debt. Never assume that the collector is providing accurate information. Once this information is requested, the collector has five days from the initial contact to provide this verification including the following information:

  • The amount of the debt;
  • The name of the original creditor;
  • Information showing that the person has 30 days to dispute the validity of the debt.

If any inaccurate information is provided by the debt collector, this could be used as further proof that they are exercising unethical debt collection practices under the FDCPA.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Related Resources:

https://www.thebalance.com/how-to-stop-debt-collector-harassment-4107936

https://www.consumerfinance.gov/ask-cfpb/what-is-harassment-by-a-debt-collector-en-336/

Debt Collectors May Soon Be Able to Text and Email Consumers

April 25, 2019 Posted by kingcade

Debt collectors may soon have even more ways to reach consumers who are past-due on their debts. A new proposed rule from the Consumer Financial Protection Bureau (CFPB) may make it possible for debt collectors to contact consumers via email or text communications as they attempt to receive payment on overdue debts.

This news does not come as a pleasant surprise for many. After all, debt collectors do not have a good reputation for this very reason. They can be persistent, if not relentless, when it comes to debt collection.

It is reported that the CFPB received a record 84,500 complaints from consumers about debt collectors in 2017. The industry earns $10.9 billion annually and does whatever it takes to receive payment on a debt.  The industry does not seem to be slowing down either. Since the end of the recession, American consumers have taken on more debt, including car loans, mortgages and credit card debt.

This news follows recent revelations that are now coming out about the direction the CFPB has taken since the start of the Trump administration. Many critics argue that this move is further evidence that the agency is no longer going after corporations for financial abuses as hard as they have in the past. After all, this latest move does not seem to protect consumers as much as it protects the companies seeking to reach these consumers.

Arguably, the number of communications from collectors will increase, if and when this rule takes effect. However, the law does limit the frequency and content of communication being received. The Fair Debt Collection Practices Act (FDCPA) provides rules that collectors must follow. However, this law was originally written in 1977, which means it has not been updated to include email and texting technology. It is unclear at this point whether the law will be modified to reflect the updates in technology.

Without having any strict regulations to guide debt collectors on how often they can communicate with a person via text or email, collectors are essentially free to do what they want when contacting someone. The number one piece of advice we give to people dealing with creditors is to be honest. If you are unable to make a payment, do not make a promise to do so and never hide from creditors.

If you are ready to put an end to creditor harassment and make a fresh start, consult an experienced Miami bankruptcy attorney at Kingcade Garcia McMaken. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Source: https://www.cbsnews.com/news/text-me-debt-collectors-may-soon-be-able-to-text-and-email-consumers/

 

 

Do Not Believe the Lies Debt Collectors Tell You

February 8, 2019 Posted by kingcade

Debt collectors will tell you just about anything to get you to pay on a debt. They are persistent, to the point of being rude or even harassing at times. One thing that many debt collectors, especially the less-than-reputable collectors bank on is the fact that you will not know when your rights are being violated or when you are being lied to.

How do you know whether you are being fed a line or whether you are being told the truth by a debt collector?   Here are some of the most common lies debt collectors will tell you.

Threatening to take you to court – even jail.

Under the Fair Debt Collection Practices Act (FDCPA), third-party debt collectors cannot threaten to take you to court on a debt if they have no intention of actually doing this. Many also will threaten to garnish your wages if you do not pay. Wage garnishment does not occur that easily. It only happens after a debt collector files a formal legal claim against you, a hearing is held where you have the right to present your side of the story, and a judgment is issued. Only then can a debt collector file a wage garnishment, which still has to be granted by the judge before your wages can actually be garnished. Many collectors, however, will make these statements in hopes that they will scare you enough into paying them.

The debt collector does not have to prove you owe the debt.

This lie is another one that goes directly against the FDCPA. If you are contacted by a debt collector who claims you owe money on a debt, you have the right to request written proof or validation of the debt. You then have 30 days normally to dispute the debt, if you do not believe you owe it. In fact, under the FDCPA, consumers have the right to send the debt collector a formal letter known as a “debt validation letter,” requesting more information on the debt to see what amount is owed.

This validation includes a complete payment history, a copy of the original loan agreement or credit application and proof that a third-party debt collector has the right to contact you on the debt, if someone other than the original creditor has contacted you. Many collectors will say they do not have to legally provide you this proof, but that statement is completely untrue.

Additionally, according to the Federal Trade Commission (FTC), if a creditor cannot validate a debt, the creditor cannot collect on the debt, is not permitted to contact you on the debt, and is not allowed to report your debt to creditor bureaus. Violating this provision is a violation of the Fair Credit Reporting Act and can result in a $1,000 fine.

Paying off the debt immediately will improve your credit score.

Mentioning your credit score is often a quick way to get you to act, and debt collectors know this fact. Many collectors will claim that you can immediately improve your credit score if you pay them immediately. The problem is, once your debt is in collections or is considered 90 days past due, this blemish will stay on your credit reporting even if you make an immediate payment to the debt collector. They cannot promise that your credit score will improve with that payment because it simply is not possible. It is possible, however, to get a written agreement from the creditor or collector that they will remove all negative information from them on your credit report, but most consumers are not aware of this possibility, so it is rarely utilized.

Threaten to expose your debt to others.

Debt collectors may also threaten to expose you and the fact you owe this debt to others you know, including family members, friends, even your employer. However, under the FDCPA, debt collectors are prohibited from revealing any information about the debt to anyone other than the debtor. This protection is meant to keep the debtor free from intimidation or harassment from debt collectors and to keep this information private, as it is personal information only to the debtor. If the collector makes this threat, report the company immediately to the FTC as they are violating federal law.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.