Fair Debt Collection Practices Act Archives - Page 3 of 9

What You Can Do if a Creditor Is Harassing You

Posted on June 14, 2019by Admin

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/

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

Debt Collectors May Soon Be Able to Text and Email Consumers

Posted on April 25, 2019by Admin

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/

Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Do Not Believe the Lies Debt Collectors Tell You

Posted on February 8, 2019by Admin

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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Debt Relief, Timothy Kingcade Posts

‘Overbiffing’ is the Latest Trend in Illegal Debt Collection

Posted on November 6, 2018by Admin

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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Bankruptcy Law, Debt Relief

Beware of Law Firms’ Letters Saying You Are Being Sued for an Outstanding Debt

Posted on October 29, 2018by Admin

Normally when you get a letter in the mail from an attorney’s office, you take the threat of a potential lawsuit seriously. However, some consumers are finding that they are being contacted by law firms alleging that they are being sued for a debt that they do not actually owe.

One report has come from a consumer who was contacted by a San Diego law firm, Hyde & Swigart, via a letter that stated that the addressee may have been sued and that county records indicated that he or she has been sued recently regarding a debt that is outstanding.

The letter also stated that if the individual had not received documents for a proceeding it is likely because the debt collector who is pursuing the debt did not send notice of the proceedings to the consumer in hopes of getting a default judgment against him or her. The firm then stated that they would help the consumer by reviewing the case for free. If the consumer wanted to hire the firm to represent him or her on the debt, it would cost him or her anywhere from $300 to $850. The problem is, this firm is offering to pursue a legal claim that may or may not actually exist or may not involve the person contacted.

This issue is not an isolated one, it is actually quite common. These firms will check the dockets for debt lawsuits and will send letters to those involved in hopes of getting business. However, the names listed on these cases may not actually be accurate, or they may not be the same person as the individual who receives the letter. In cases of mistaken identity, these letters raise a major red flag.

Many seniors have fallen prey to these tactics. These individuals are understandably concerned when they receive these letters, but they may jump to action before researching whether the claims are valid.

One item of concern that all consumers should be aware of is the fact that you have the legal right to be served with notice of legal proceedings. A debt collector cannot easily get a default judgment issued against you for a debt if you have never received notice of a legal proceeding. If that has happened, you do have legal recourse to fight the default judgment.

What these law firms are doing is another form of “ambulance chasing,” to put it into other words. The tactic is also alarming to individuals who are not the actual debtors involved in the case. By the type the person contacted has done the research to ensure that he or she is not the actual person named in the case, he or she has already gone through a great deal of unneeded and unwanted stress and anxiety.

These firms claim that the letters are helpful to the people they contact, although they have not gotten a favorable response from many of those reached.

Many of the state bar associations prohibit any solicitation for new clients if the communication is “false, deceptive or which tends to confuse, deceive or mislead the public.” However, many of these letters state that the person may or may not be party to litigation. The letter does not actually say that the person is, in fact, a party to any litigation. Therefore, the communication may not actually be considered deceptive. It is, however, walking a fine line.

Another consideration to keep in mind is your debt may not be legally collectible. If the debt has passed the state’s statute of limitations, a legal action cannot be brought to collect upon the debt. This defense will need to be raised in court if a legal action is brought, but it can fight any action, if one is presented.

Lastly, a consumer always has the legal right to request written confirmation of the debt that is allegedly owed. If a law firm has contacted you with a similar letter, you have the right to request written confirmation of the debt to see if it is a debt you owe. Do not go off the information in the letter alone. The creditor is legally obligated to provide this written confirmation as soon as it is requested. If a debt collector contacts you on a debt, the first step to take is to request written verification on the debt.

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

Tips to Protect Yourself from Zombie Debt Collectors

Posted on October 25, 2018by Admin

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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Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

How to Handle Creditor Harassment

Posted on October 8, 2018by Admin

Dealing with creditors and debt collectors is one of the worst parts of dealing with debt. Even the thought of continuous debt collection calls can keep a person up at night. Debt collectors are oftentimes relentless when making these calls and can cross the line from a legal standpoint. It is important to remember, that as a consumer you have rights when it comes to debt collection.

The Fair Debt Collection Practices Act (FDCPA) was created to protect consumers from harassment and threatening behavior from third-party creditors.

The FDCPA protects consumers from the following creditor behavior:

Contacting your employer regarding your debt or another party, except for contacting them to get information on your location;
Contacting you at unreasonable hours, either very early in the morning or late at night;
Calling you at work after being told to no longer contact you at your place of employment;
Calling excessively or repeatedly;
Using threatening or abusive language or behavior;
Threatening a lawsuit when they have no intent to pursue a lawsuit;
Threatening to publish or share your information because of your failure to pay a debt;
Any other abusive, obscene or threatening behavior.

The important first step to take when faced with a debt is to ask for confirmation on the amount owed. In fact, the debt collector is required to notify you that you have the right to request this validation within 30 days after receiving the first written communication from the debt collector. Requesting validation of the debt can also be done over the phone. By requesting validation of the debt, the consumer is making the debt collector verify that the debt is actually owed.

If the amount is accurate and you still are not able to pay on the debt, it is always recommended that you speak directly with the creditor and explain the situation. Tell them that you are unable to pay. Never provide your bank account, routing number or debit card information to the creditor.

The FDCPA also dictates other requirements as to when the collector can call, which is only between the hours of 8 a.m. and 9 p.m. The debt collector is also restricted from using any language or tactics that may be deemed harassing, threatening or abusive. If the debt collector tries to contact other third parties, such as friends or family members of the individual, they may not disclose information on why they are trying to reach the debtor but can only contact them to get the correct contact information for them.

The ideal situation would be for the creditor to work with you on an affordable repayment plan option. Many times, a letter from the debtor is not enough to get the collector to stop communication, and at this point, an attorney may be needed to write a letter. If a third-party debt collector persists in this behavior, you may be entitled to file a legal claim for an FDCPA violation and sue them for damages, which can include attorney’s fees plus an additional $1,000.

Bankruptcy Law, Credit, Timothy Kingcade Posts

How to Spot a Debt Collection Scam

Posted on July 17, 2018by Admin

Debt collection scams are an all-too-common occurrence these days as scammers look for ways to take advantage of people already in a bad financial situation. A recent scam has been reported by the Federal Trade Commission (FTC), where scammers have been calling residents regarding fake power bills. These callers are threatening to turn off the person’s electricity if they do not immediately pay them over the phone.

Last year, the FTC received a total of 2.7 million complaints with debt collection scams being the largest category of complaints. Not all scams are the same, and some scammers, like the utility ones, are far from sophisticated in their schemes. However, the FTC is reporting that many collections scams have become more advanced. The individuals contacting the callers are using names of real local businesses or are posing as lawyers. Some of their claims are so believable that the person on the receiving end of the call believes they are legitimate.

It is important to always have your guard up. Ask for the name of the business contacting you and do the research before simply paying the debt. Also, be aware of what methods the company is using to make threats. For example, if the company trying to collect upon a debt is saying that they will only accept payment in the form of a prepaid gift card, that is a red flag that the caller is perpetuating a scam. The same goes for a company threatening to have someone arrested for nonpayment. Other legal avenues are available for a company collecting on a payment, and the first option is not to have that person arrested.

When someone gets a call from a potential scam, after asking the name of the company, it is recommended that the caller get off the phone and call the company back by using the phone number accessible via the consumer’s own records. Inform the company that someone has made contact and is demanding payment. That company will want to know whether its name and identity is being used. The company will also be able to verify whether any actual debt collection is being pursued against the caller.

If the person on the other end of the phone is a legitimate third-party debt collector and is still using harassing techniques, the consumer still has rights. Under the Fair Debt Collection Practices Act (FDCPA) a consumer is protected from debt collectors who are using unfair, abusive or harassing debt collection practices. Many debt collection agencies resort to scare tactics to get individuals to pay on their bills, but these tactics can become illegal if they cross the line from persuasive to abusive.

If an individual is facing debt collection proceedings, bankruptcy may be a viable option for him or her. After a petition for bankruptcy has been filed, an automatic stay goes into effect which puts an immediate stop to any pending collection proceedings which can give the individual relief from ongoing collections attempts and contact from debt collectors.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

What Constitutes Harassment by a Debt Collector?

Posted on July 2, 2018by Admin

For an individual struggling with insurmountable debt, the continuous calls and communications can be overwhelming and stressful. However, at what point do these communications constitute harassment? And if an individual believes that he or she is being harassed by a debt collector, what is the recourse this person has against the debt collector?

Fair Debt Collection Practices Act

Debtors have protection from harassment from third-party debt collectors under a federal law, the Fair Debt Collection Practices Act (FDCPA). Under this law, debt collectors are prohibited from harassing, oppressing or abusing debtors while trying to collect upon a debt. This behavior includes continuous phone calls meant to annoy or harass the individual, use of obscene language and making threats of violence or retaliation against the debtor.

Specifically, the FDCPA prohibits the following:

Repeated phone calls annoying, abusing or harassing the debtor or anyone answering the phone;
Use of obscene or profane language in these communications;
Threats of violence or causing harm to the debtor or other person on the phone;
Publishing a list of individuals who refuse to pay debts, not including reporting the information to a credit reporting company;
Not disclosing the debt collector’s information when communicating with someone;
Contacting third-parties connected to the debtor and giving them information regarding the debt and/or why they are calling;
Contacting the debtor at work or showing up at the debtor’s work.

The FDCPA prohibits misrepresentations from being made about the debt. Essentially, the FDCPA makes it so debt collectors cannot use false, misleading or fraudulent practices when collecting on the debt. This means the debt collector cannot lie about how much is owed, cannot make false threats that the company will have the debtor arrested, cannot make false statements that the person on the phone is an attorney when he or she is not, cannot make threats to do things that are not legal, and cannot make threats to do something that the debt collector, in fact, has no intention of doing or right to do.

After the debtor has experienced a series of these violations, the FDCPA requires the debtor to send written notification to the debt collector to stop communicating with him or her and informing the debt collector that this communication is in violation of the FDCPA. If the debt collector continues to push and communicate with the person after this notification, it is recommended that the debtor file a claim for an FDCPA violation. If the individual does file an FDCPA claim and wins, the debt collector will pay the debtor damages, as well as attorney’s fees for having to file the claim.

It is highly recommended that the debtor keep a file of all communication received by the debt collector and keep all recordings of voicemails or other communications. It is also recommended that the debtor write down all dates and times that these conversations have occurred, along with notes about what was discussed in the event a legal claim needs to be filed.

Our firm works to hold creditors accountable for violating the protections allotted by the U.S. bankruptcy laws. Recently, our firm’s motion was granted by a Florida judge in a case that held the creditor in contempt of court for violating the automatic stay in a Miami bankruptcy case. The Order directed the creditor to cease and desist all eviction proceedings until further order of the court. The creditor in this case was also required to pay attorneys’ fees for our firm having to bring forth the motion to enforce the automatic stay to protect our client.

If you are dealing with a creditor you think may have violated the automatic stay, contact your attorney immediately. An experienced Miami bankruptcy attorney will know whether the contact was innocent in nature or a willful violation worth pursuing.

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Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Debt Collectors’ Dialing Strategies Come Under Scrutiny in State Supreme Court Ruling

Posted on June 28, 2018by Admin

A recent Massachusetts Supreme Court ruling has given consumers more protection from creditors seeking payment on outstanding debts while leaving some questions unanswered for creditors. The court has ruled in Armata v. Target Corporation, that creditors are not exempt from rules that limit contact with consumers who owe them money.

A copy of the decision can be found here.

In this case, the consumer, Debra Armata, incurred debt through her Target-brand debit card, and this debt became more than 30 days past due. Target then began to collect on the debt and contacted Armata using a predictive dialer. These devices transfer the cardholders who do answer the phone to a live representative about 95 percent of the time with the other five percent of the time leading the person to a recorded message. There are no voicemails left if the person does not answer the phone.

Under Massachusetts law, debt collection laws limit how many times a creditor can try to contact a consumer telephonically to collect on a debt, limiting these calls to two every seven days. However, according to the Massachusetts Attorney General, any unsuccessful attempts by the creditor do not constitute initiation of communication if the creditor was “truly unable” to reach the debtor or leave a message.

Target did not argue that it contacted the plaintiff more than two times in seven days. However, the company argued it did not initiate communications because it uses an auto dialer and does not leave voicemails if no one answers. The company stated it was exempt from these regulations for this reason as it was “truly unable” to reach Armata.

The Court disputed this argument stating that Target was trying to create too large of a loophole that would essentially allow any creditor to avoid the limits imposed by state law by using auto dialing technology. It would leave debtors unprotected from these continuous communications.

The attorney general’s term “truly unable” was better defined in the opinion. One example given by the court was if the person did not answer the phone and did not set up his or her voicemail. If that situation occurred or the person’s voicemail was full, or phone disconnected, then the company would qualify as being “truly unable” to reach the consumer.

The court also clarified that creditors who use automatic dialers or those who voluntarily decide to not leave voicemail messages, such as Target, are subject to the state’s regulations.

Target had also argued that the company was not able to leave voicemail messages because doing this would risk violating the Fair Debt Collection Practices Act (FDCPA). The court pointed out that the company did not fall within the restrictions of the FDCPA, since that law covers third-party debt collection agencies and not the actual creditors themselves, such as Target.

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