Understanding Illegal Debt Collection Practices

The Fair Debt Collection Practices Act (FDCPA) protects consumers from certain actions related to debt collections. What most consumers don’t know is that collections agencies generally don’t keep attorneys on hand and will only file a lawsuit if the debt is significant enough to warrant the effort. Debt collectors are not allowed, however, to threaten lawsuits or make any threat that they cannot actually carry out. This is largely because debt collectors would make legal threats against debtors concerning custody of their children or potential criminal action to scare debtors into paying immediately.

Federal Authorities Break Down Common Illegal Collections Tactics 

In 2019, The Fair Trade Commission (FTC) and the Bureau of Consumer Financial Protection (BCFP) published a report detailing the more than 81,000 complaints they received during the fiscal year.

The six most common reasons for filing complaints were:

• I don’t owe the money/I already paid this debt. The most common complaint involved consumers claiming they didn’t owe a debt that the collector said they owed. These are debts that may have been discharged in bankruptcy, already paid, or someone with a similar sounding name incurred the debt.

• What does this even mean? Debt collectors like to send ominous-sounding letters, but sometimes consumers have no idea what they’re talking about. Collection letters must contain three pieces of information. Those are: the name of the creditor, the amount owed, and a means of disputing or obtaining proof of debt. Absent those, the letter is illegal for collections purposes.

• Collections agency is abusive or aggressive. Debt collectors may not harass you, call you before 8 a.m. or after 9 p.m., tell your family you owe them money, or make a threat against you they cannot actually make good on.

• False threats. As stated earlier, a collections company cannot threaten any action that it has no legal standing to actually do. Companies that trade in expired debt might threaten a lawsuit. But since no one can file a lawsuit over expired debt, it’s illegal to claim you can or make that threat.

• They’re lying. Threats are made to coerce an individual into paying their debt, but debt collectors are not allowed to lie to debtors at all. In some cases, debt collectors illegally impersonated law enforcement, lawyers, or government officials. In other cases, they misrepresented the balance of a debtor’s account. In one case, a collections agency sent mail to debtors from a law firm even though no lawyer was named in the letter.

• They contacted my boss or family. There are limits on what debt collectors can do. They may only contact a family member once for the purposes of determining where you are or how they can reach you. They cannot discuss the matter with your boss and cannot contact you at work if you can’t receive calls. If the debt is expired, you can demand the collections agency stops contacting you. If you have an attorney, the collections agency must talk to them (and not you).

Talk to a Chicago Bankruptcy Attorney 

If you’re worried about collections agencies, spiraling debt, or how you’re going to make your next car payment, a Chicago bankruptcy attorney can help. Call Bentz Holguin Law Firm, LLC to set up an appointment today.

https://bentzholguinlaw.com/top-five-reasons-people-file-bankruptcy-in-illinois/