Tag: abusive debt collection

Debt Collection

What Behavior Is Considered Harassment by a Debt Collector?

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Most people never expect to fall behind on their debts. Sometimes, however, circumstances beyond a person’s control result in them being contacted by a debt collector. This is not uncommon today. In fact, 77 million American consumers or 35 percent of all adult consumers have a debt in collection.

Being on the receiving end of debt collection phone calls and other communication can be extremely stressful. Debt collectors are paid to do whatever they can to get a consumer to pay off a debt, which often results in the collectors trying to reach the consumer through phone calls, emails, texts, and direct mail so much that it borders on harassment. However, federal law prohibits certain behaviors from third-party debt collectors to protect the consumer.

Debt Collection, Debt Relief

Predatory Debt Collectors Barred from PPP Loans Under New Bill

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New legislation introduced this week will effectively bar all predatory debt collectors from receiving money from funds received under the federal government’s Paycheck Protection Program (PPP).  

The measure has been introduced by Representatives Suzanne Bonamici (D-Ore.) and Marie Newman (D-Ill.). In announcing the proposed legislation, the lawmakers pointed to an analysis conducted by the Washington Post in January 2021. The Post reported several incidents where debt collection companies had harassed consumers for payment on debts after they had received their own financial assistance from federal PPP loans. It was their hope that this legislation will curb these practices and will effectively block predatory debt collection firms from receiving PPP money themselves.  

Debt Collection

State and Federal Agencies Teaming Up to Combat Illegal Debt Collection

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Debt collection is a profitable business in the U.S., but not all debt collectors follow legitimate, legal collection practices. According to officials from the Federal Trade Commission (FTC), most consumer complaints made annually involve illegal debt collection practices, which is why they have made recent efforts to crack down on these types of tactics. 

In response, the FTC has launched a multi-agency campaign called “Operation Corrupt Collector.” This crackdown campaign focuses on educating consumers on how to identify illegal debt-collection practices, as well as enforcement against debt collectors who are found to be breaking the law.  

Bankruptcy Law, Debt Relief

Trump Administration Delays Consumer Protections for Abusive Payday and Car-Title Lenders

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New consumer protections against abusive lending practices have been placed on hold by the Trump Administration for another 15 months. The protections that were enacted in 2017 were set to take effect this week are now being delayed, perhaps indefinitely.  The reasoning behind the delay of this consumer safeguard: ‘It’s too troublesome for lenders.’

The delay is being viewed as just another example of the current administration stripping away consumer-friendly policies enacted under the Obama administration.

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

What You Can Do if a Creditor Is Harassing You

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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/

Credit, Debt Relief

The Dangers of Subprime Auto Loans

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Having a car for most of us is a necessity, especially if someone wants to get a job and maintain employment. However, the purchase of a vehicle can be tricky for those struggling financially. For many car buyers, a subprime auto loan seems like the perfect solution. However, these types of loans are often more trouble than they are worth, and we caution consumers before using them to finance a vehicle purchase.

What Is a Subprime Car Loan?

A subprime auto loan is a loan aimed at borrowers who have lower credit scores to help them purchase a vehicle. They are offered by various lenders, including larger national banks, as well as smaller finance companies. Many subprime car loans are offered through online lenders, appealing to those who need quick financing.

Disadvantages of Subprime Car Loans

Many different downsides exist to using a subprime auto loan to purchase a vehicle, including the following:

  1. High Interest Rates: Because subprime car loans are normally targeted towards borrowers with lower credit scores, they come with higher interest rates. In fact, subprime car loans can have interest rates that are three times what a borrower with good credit would receive. These high interest rates are meant to offset the risk the borrower poses to the lender, but what results is the borrower making higher payments for a longer period of time on a car that is nowhere near the value of the loan owed on it.
  2. Subprime Car Loans Are Expensive: Because of the high interest rates that accompany subprime car loans, the total amount the purchaser ends up paying can be significant. In fact, a large amount of what the purchaser ends up paying on a monthly basis is solely interest that serves as profit for the lender and makes no dent in the principal owed.
  3. Aggressive Debt Collection Tactics: If the purchaser is not able to keep up with payments on the subprime loan, the situation can get ugly very quickly. Some of the less-than-reputable subprime lenders have been known to be quite aggressive when it comes to collecting on a subprime loan. If the loan was obtained through a larger bank, some of these lenders may be willing to work with the borrower on a payment plan, while others will go directly to collections or even repossession of the vehicle. The last thing a borrower with a low credit score needs is a default or collection on his or her credit report, but the high interest rates on these loans can make it very difficult to keep up with payments.
  4. Vehicle Tracking for Repossession: Not every vehicle that has been purchased through a subprime loan comes with this feature, but it is a common practice for subprime auto lenders to use electronic trackers on the cars to make finding the car easier in the event the vehicle is repossessed. Other devices have been known to completely disable the car if a payment is missed or until the lender gets the car back. The problem is the purchaser may not even know this device is on the car until it is too late. If the borrower believes he or she is going to be late on a payment, it is best to let the lender know in the event this device is installed on the vehicle.

Avoiding a Subprime Car Loan

Many different options exist for a borrower who has bad credit and who still needs to purchase a car. One common solution is to find a co-signer with good credit to help get the loan. Another option is to find a second-chance lending program to purchase a car. Many lenders offer these types of programs to their customers who have less than perfect credit. However, not all lenders offer these types of programs.

In the event a borrower has no choice but to accept a subprime car loan, it is recommended that he or she keep up with payments. After a year or so of regular and consistent payments, the borrower may be able to refinance the loan with a better interest rate and loan terms.

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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.

 

 

 

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Debt Collectors May Soon Be Able to Text and Email Consumers

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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/

 

 

Debt Relief, Timothy Kingcade Posts

‘Overbiffing’ is the Latest Trend in Illegal Debt Collection

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A new trend is occurring involving unfair debt collection practices known as “overbiffing.” This practice occurs when a creditor or debt collector overstates a debtor’s balance in hopes of getting more money than what is owed.

A recent case in New York highlighted the problem. In the case, a New York debt collector overstated account balances for thousands of consumers in an effort to defraud them into paying more than they actually owe. The debt collector also used abusive and illegal tactics to get consumers to pay. The Fair Debt Collect Collections Practices Act (FDCPA) specifically prohibits this type of behavior, as was addressed by the court.

The “overbiffing” term comes from the act that the debt collector is trying to accomplish. The scam these companies are trying to accomplish is to tell the individual that what they are paying, which is an overstatement of what they owe, will pay the person’s “balance in full,” which is shortened to “BIF.” Of course, these “balance in full” payments are well over what that person owes.

One such debt collector is based in Buffalo, New York, named Robert Heidenreich, also known by the name “Bobby Rich.” The debt collectors working for Heidenreich have been accused of overstating balances that they say consumers owe on accounts. Regulators in this case used forms to compare the actual balances these consumers owe to the amounts that these scammers are saying that they owe. What these regulators found was that the difference between these two amounts was in the hundreds or even thousands of dollars.

Heidenreich’s employees were also accused of misleading the consumers about who was calling. Many of the employees knowingly violated the FDCPA by posing as attorneys or even law enforcement, as a scare tactic. Threatening legal action when one does not have the right to do so or impersonating an attorney or law enforcement is a blatant violation of the FDCPA. These employees would tell the consumer that they had committed a crime and were about to either be arrested or served with notice of a legal proceeding regarding the debt. The consumer would then be directed to another debt collector pretending to be an attorney, who would take payment over the phone on the alleged amount owed. If the consumer questioned the person on the phone, the debt collector would become aggressive and even abusive in response, which is another violation of the FDCPA.

If you have been contacted by a debt collector who is committing one or more of these actions, it is important you know your rights. Per the FDCPA, any third-party debt collector is not allowed to use threatening or abusive language when communicating with the debtor regarding a debt. The FDCPA also prohibits third-party debt collectors from misrepresenting who they are, as well as the consequences of not paying the debt. If a third-party debt collector has done any of these actions, you may have a valid claim for damages under an FDCPA violation.

As a consumer, you also have the right to request validation of the debt from the debt collector. This validation must be produced in writing and must include how much is owed and to whom the debt is owed. You should then take that information and check to make sure that the amount given is, in fact, correct. This information can be validated, for example, with information on the consumer’s credit report.

If a debt collector has violated any provision of the FDCPA, it is important you report the debt collector to the state attorney general’s consumer affairs division, as well as the FTC.

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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.

 

 

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Tips to Protect Yourself from Zombie Debt Collectors

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Debt collectors can be persistent when it comes to trying to collect on a past-due account. While many of these efforts may be completely valid, debt collectors will even try to collect on debt that is not legally collectible, otherwise known as “zombie debt.”

What exactly is zombie debt? A zombie debt is a past-due account that is outside of the statute of limitations, meaning it is not legally collectible. Every state has a statute of limitations which sets how long a creditor has to sue on an unpaid debt.

Florida’s statute of limitations varies depending on the type of debt. For example, written contracts such as personal loans, the statute of limitations is five years. So once this type of debt is more than five years past due, the lender can no longer sue to collect money owed. For other debts, the statute of limitations is shorter. Oral contracts and revolving accounts such as credit cards have a statute of limitations of four years.

However, just because the timeline has passed does not mean the creditor will stop trying to collect on the old debt. Many debtors will mistakenly pay on a debt that is past the statute of limitations because they are not aware of this legal protection.

It is extremely important that you not pay on a debt that is past the date for the statute of limitations.  A single payment can reactivate the debt and reset the clock on the statute of limitations. This tactic is otherwise known as re-aging an old debt, and it is one that is commonly used by debt collectors to trick debtors into paying on a debt that they would not be legally obligated to pay.

If a debt collector contacts you on a debt, the first step to take is to request written verification on the debt. The debt collector must provide you with information to show how old the debt is and how much is owed. If the debt is past your state’s statute of limitations, you will not be legally required to pay back the debt.

It also helps to know your rights when it comes to communications from debt collectors. Under the Fair Debt Collection Practices Act (FDCPA), third-party debt collectors are prohibited from engaging in collection tactics that are harassing, threatening or illegal. If the collector is contacting you before the hours of 8:00 a.m. or after 9:00 p.m., they are in violation of the FDCPA.

The same rule applies if they contact you at work if you have informed them that they are not to contact you there. They are prohibited from using threatening or abusive language when trying to collect on the debt, as well. They also cannot misrepresent who they are by saying that they are an attorney or litigation firm when contacting you. They are also not allowed to threaten a lawsuit if they know they have no grounds to file one, especially if the statute of limitations has expired.

If you feel you have been a victim of zombie debt collection, first request that the debt collector provide you written documentation verifying the debt and check for any discrepancies. It is important that you respond to all court summonses to ensure that a debt collector does not win a court case by default.

If you have received notice of a lawsuit on a debt that has expired per the statute of limitations, do not ignore the suit and simply assume the court will recognize on its own that the debt is old. Courts give you a limited time to file an answer to a legal complaint, and by not responding, you could end up with a default judgment that is not in your favor. If you receive a notice of a claim for a debt that has expired, it is important that you contact an attorney who can file an answer on your behalf stating that the debt is past the statute of limitations and further protect your legal rights.

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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.

 

 

Bankruptcy Law, Credit, Debt Relief

Rent-A-Center Accused of Kicking in Doors and Crushing Customers’ Credit

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Rent-A-Center has recently made headlines due to its unethical treatment of customers and harassing debt collection practices.  In fact, it has gotten so out of hand that the complaints and harassment lawsuits have grown in numbers.

Rent-A-Center customers throughout the U.S. are now complaining that Rent-A-Center has virtually destroyed their finances after they have leased electronics, appliances and furniture from the company.

Rent-A-Center is a Texas-based publicly-traded company. The company started in 1986, offering consumers a way to purchase electronics and other household items that they would not be able to afford otherwise. The customers rent these items, making payments on a monthly, semi-monthly or even weekly basis. At any time during the lease, the customer can terminate the lease and return the household goods, or they can keep making payments until they own the items in full. The company’s mission aims to help those in lower-income households by allowing them to purchase items they would not otherwise be able to afford.

Once a customer begins to fall behind on his or her payments, that is where issues arise. Just one missed payment, missed by something as small as a day, can trigger aggressive collection efforts.

One federal lawsuit, brought by a Florida resident, claimed that she was forced to hide in a closet with her two young sons while a Rent-A-Center employee pounded on her door to collect payment on her rented household items. Another lawsuit claims that a Rent-A-Center worker kicked in her front door after she fell behind on payments for her laptop computer.

Even debt collectors are complaining about the practices of Rent-A-Center. In 2014, the collection company, Acceptance Now, took on accounts from Rent-A-Center, but as soon as debt collectors began making efforts to collect on the accounts, customers continually informed the agents that their debts had already paid. The problem was Rent-A-Center’s records did not reflect these payments.

Many states allow rent-to-own companies, like Rent-A-Center to file criminal charges against customers who do not pay on their rental agreements and do not return items when asked to do so. The collectors are well aware of this information, and Rent-A-Center regularly uses these threats to scare customers into making payments. It can make customers feel trapped in a no-win situation, not only fearing for their safety against aggressive collectors but fearing jail time if they are not able to make payments.

Between January 2016 and June 2017, the Federal Trade Commission received 2,779 complaints regarding both Rent-A-Center and Acceptance Now. Out of these complaints, 90 percent of them involve aggressive collection tactics, involving employees banging on customer’s houses and blasting car horns outside of homes.

Know your rights when it comes to creditor harassment. The Fair Debt Collection Practices Act (FDCPA) was designed to help prevent creditor abuse and harassment.

Click here to read more on this story.

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.