Debt collection overview
You owe money on your bills and now a debt collector is contacting you, but you have no money for repayment. Before you ignore them, educate yourself in what your options are.
The following information is obtained from the Federal Trade Commission (FTC) Consumer Information which is found online at http://www.consumer.ftc.gov/articles/0149-debt-collection. FTC is the nation’s consumer protection agency that enforces the Fair Debt Collection Practice Act (FDCPA) which “prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.”[1] The debt you owe from personal, family and household (excluding debt owed from operating a business) are covered under the FDCPA.
WHAT IS A DEBT COLLECTOR? People are familiar with debt collectors and collection agencies, but in some cases, there are lawyers who specialize in debt collections. There are companies that purchase delinquent debts and collect on them. Debt collectors contact those behind on payments and may use various tactics in collecting money – by harassing an individual to pay.
GENERAL PRACTICE IN VIOLATION OF THE LAW
Here is a brief description of how a debt collector may violate under the FDCPA (15 U.S.C. §§ 1692-1692p). For detailed information, check out their booklet at https://www.ftc.gov/system/files/documents/plain-language/fair-debt-collection-practices-act.pdf
- Harassment or abuse (15 U.S.C. 1692d): Debt collector may not threat to use of violence or cause harm on an individual or individual’s reputation or property; use of obscene and abusive language; or publicize names of debtors (however, debt collector is allowed to provide debtor’s information to a consumer reporting agency).
- False or misleading representations (15 U.S.C. 1692e): Debt collector may not lie about who they are when contacting you; mislead you to think that you will be arrested for unpaid debt or provide you with an incorrect amount of your debt; or mislead you by providing you with paper that looks like an official court or government document but isn’t.
- Unfair practices (15 U.S.C. 1692f): Debt collector may not collect interest fees or charge you additional fees unless stated in the contract. Also, your post dated check cannot be deposited earlier than stated date.
COMMUNICATION WITH DEBT COLLECTOR
Without your permission, debt collector may not contact you before 8 a.m. or after 9 p.m. (based on your local time). Debt collector may not contact you if you are represented by an attorney regarding your debt unless the debt collector was uninformed. In this case, direct the collector to your attorney. Lastly, debt collector may not contact you at work if they’ve been informed that your employer does not allow such calls.
INFORM THE DEBT COLLECTOR
Once you have spoken with the debt collector and decide afterwards that you don’t want to be contacted again, tell the collector – in writing.
Write a letter within 30 days after you’ve been first contacted. There are sample letters available for you to choose; find one that’s appropriate for your situation – letter informing the debt collector that (1) you have been mistakenly contacted for debt you are not responsible for; (2) you request additional information regarding the debt; (3) you want the debt collector to stop contacting you; and (4) you want to provide the debt collector instructions on how you can be reached. Sample letters are available online at http://www.consumerfinance.gov/askcfpb/1695/ive-been-contacted-debt-collector-how-do-i-reply.html. These sample letters are templates for debt collection, not for credit card companies or for your original lenders. Even if more than 30 days have passed, it’s still a good idea to send a letter.
Make a copy of your letter and the completed forms of certified mail and return receipt. Send the original by certified mail, and return receipt so you’ll have record of what was delivered. Once the collector receives your letter, they may not contact you again, unless for two exceptions: (1) to inform you that there will be no further contact or (2) inform you that they or the creditor intend to take a specific action – as in file a lawsuit with the court. Keep in mind that a letter to the debt collector does not clear your debt.
GARNISHMENT
If a debt collector sues you, respond promptly by the due date that is listed in your court papers. If the court agrees with the debt collector, your wages can be garnished and money is withdrawn from your bank account. Federal benefits are protected from garnishment such as:
- Social Security Benefits
- Supplemental Security Income (SSI) Benefits
- Veteran’s Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Military Annuities and Survivors’ Benefits
If you are delinquent with your taxes, behind on your alimony or child support, or student loans, funds from federal benefits may be applied towards debt payment.
FILE A COMPLAINT
To file a complaint, contact the FTC, Consumer Financial Protection Board or your state Attorney General’s office. You have one year to file a complaint with your state or federal court about a debt collector’s actions. Unfortunately, your debt isn’t eliminated even if a debt collector has violated the FDCPA rules.
Federal Trade Commission’s telephone number is (202) 326-2222 or website at https://www.ftccomplaintassistant.gov/GettingStarted?NextQID=24#crnt
The Consumer Financial Protection Board’s telephone number is (855) 411-2372 or website at http://www.consumerfinance.gov/complaint/#debt-collection
Because the state and federal FDCPA rules may be different, request assistance from your State Attorney General’s office and ask if the debt collector has violated your rights. To locate your State Attorney General’s office, check online at http://www.naag.org/.
The contact information for the District of Columbia’s Attorney General, Karl A. Racine (D), is 441 4th Street, NW, Suite 1100S, Washington, DC 20001. His telephone number is (202) 727-3400.[2]
A pamphlet, “Protect Yourself: A Consumer Protection Pamphlet” prepared by the District of Columbia Office of the Attorney General is available at http://oag.dc.gov/sites/default/files/dc/sites/oag/page_content/attachments/Consumer%20Protection%20Pamphlet.pdf
For further assistance, If you need an attorney to represent you, the National Association of Consumer Advocates provides a list of attorneys that you may want to connect with. The website is http://consumeradvocates.org/find-attorney
RESOURCES
District of Columbia’s Official Code for Debt Collection Law is §28-3814 and available at http://oag.dc.gov/sites/default/files/dc/sites/oag/publication/attachments/28-3814%20-%20debt%20collection%20law.pdf
District of Columbia Office of the Attorney General information regarding DC Consumer Protection Law is available at http://oag.dc.gov/page/district-columbia-consumer-protection-laws
DISTRICT OF COLUMBIA OAG CONSUMER COMPLAINT FORM
http://dcforms.dc.gov/webform/oag-consumer-complaint-form
STATUTE OF LIMITATION/TIME-BARRED DEBTS
http://www.consumer.ftc.gov/articles/0117-time-barred-debts
THE NATIONAL CONSUMER LAW CENTER
https://www.nclc.org/issues/debt-collection.html
News Articles
Creditors double down in pursuit of consumer debt
ProPublica
This ongoing multimedia series explores the tactics that banks, hospitals, and other lenders use to pursue consumer debt. The frequent use of the courts and garnishment has made it such that debtors with even the smallest of loans to repay are at the mercy of state laws, most of which permit creditors to garnish wages stemming from consumer debt.
How debt-collection practices can sink families
The Atlantic
Companies are increasingly turning to the courts to sue millions of people over consumer debts. These lawsuits disproportionately burden black neighborhoods and families, raising critical questions about disparities within debt-collection practices, experts say.
Government agencies outsource debt collection
CNN
State, city and local government agencies sometimes turn to private debt collectors to seek repayments. A CNNMoney investigation found that private debt collectors were using loopholes in federal and state consumer protection laws to go after debtors and stack steep fees.
[1] http://www.consumer.ftc.gov/articles/0149-debt-collection
[2] http://www.naag.org/naag/attorneys-general/whos-my-ag/district_of_columbia/karl-racine.php