Debt Collection & Creditor Harassment

If you fall far enough behind on bill payments for credit cards, mortgage, auto loans, medical bills or other debts, you open the door to one of the worst nightmares in life: Debt Collection Harassment.

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The definition of debt collector harassment is to intimidate, abuse, coerce, bully or browbeat consumers into paying off debt. This happens most often over the phone, but harassment also could come in the form of emails, texts, social media, direct mail or talking to friends or neighbors about your debt.

Collection agencies are permitted to recover the money owed to creditors. They are not permitted to use deceptive or threatening techniques to do so.

The Consumer Financial Protection Bureau (CFPB) received 75,200 consumer complaints about debt collectors, according to a 2020 report to Congress. The Federal Trade Commission (FTC), which regulates the debt collection industry, said that no other industry receives more complaints.

Collection agencies are most often chasing debt related to medical bills. New federal guidelines offer protection to consumers with medical debt. The guidelines hold accountable medical providers and debt collectors who use harmful or aggressive practices. The guidelines also reduce the impact of medical debt on access to other forms of credit, such as mortgages or auto loans.

Medical debt is the largest source of debts that are in collection – more than credit cards, utilities and auto loans combined. The Journal of the American Medical Association said that collection agencies held $140 billion in unpaid medical bills.

The other major areas prone to aggressive debt collectors are credit card and student loan debt or auto loan and mortgage payments. Business loans are not covered under this law.

Not counting mortgage debt, American adults owed an average of $5,178 for medical, credit cards, or utility bills that are past due. Their median debt (half owe more, half owe less) was $1,349.

A federal law — the Fair Debt Collection Practices Act (FDCPA) – outlines exactly what can and can’t happen in this business and most of the law is an effort to protect the consumers’ rights.

Summary of Fair Debt Collection Practices Act

The FDCPA originally was passed in 1977 and amended in 1996 as a response to the alarming number of complaints about methods collection agencies were using to force people to pay their debts.

Be advised that the FDCPA does not apply to the original creditor, only to debt collection agencies. Some debts have statutes of limitations or are “time-barred” – If you acknowledge a debt or pay debt collectors any amount, that statute of limitations can potentially restart.

The FDCPA says this about harassment: “A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.”

Creditor harassment laws vary from state to state, so it’s important to know what protections are offered in your state.

» More on: Debt Collection Laws by State

What Is Considered Creditor Harassment?

The methods of creditor harassment change, along with technology and human behavior. While standard telephone contact was once the norm, debt collectors now use cellphones, social media, text messaging and email. Here is a list of examples of how debt collectors can violate FDCPA rules:

  • Use of threat, violence or other criminal means to harm a person, reputation or property
  • Use of obscene or profane language
  • False representation that the debt collector represents a state or federal government
  • Misleading information on the amount or legal status of a debt
  • False implication that debt collector is an attorney or law enforcement officer
  • Implication that nonpayment of a debt will result in arrest or imprisonment
  • Causing a telephone to ring repeatedly with intent to annoy, abuse or harass
  • Publishing lists of people who refuse to pay their debts
  • Calling you without telling you who they are
  • Threats to do things that cannot legally be done
  • Threats to do things that the debt collector has no intention of doing
  • Talking to others about your debt (other than a spouse)
  • Cannot collect interest on a debt unless that is in the contract
  • Threats to seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so and it is a legal action
  • Using pre-recorded, automated or auto-dialed calls because of the Telephone Consumer Protection Act (TCPA)

If any of these apply to your case, notify the collection agency with a certified letter that you feel you are being harassed. Send a copy of the letter to the original creditor, who could offer to cancel the debt or settle at an agreeable rate in order to avoid liability.

How to Stop Debt Collection Calls

Collection agencies are infamous for violating the rules against constant and aggressive phone calls. It is the one area that causes the most controversy in their business. Be sure to keep a record of all communication between yourself and debt collectors and to communicate only via writer correspondence where possible.

After the first call from a debt collector, FDCPA sets rules for what time debt collectors can call. Further calls are permitted between 8 a.m. and 9 p.m., but with very severe restrictions meant to protect privacy. The collection agency must identify itself every time it calls. It may not call the consumer at work. It may only call the consumer’s family or friends to obtain accurate information about the consumer’s address, phone number and place of work.

It’s hard to avoid the first phone call from a collection agency, but once you’ve heard from them, there are steps you can take to stop the calls altogether.

The first move is to request a validation notice from the collection agency and then wait for the notice to arrive. Agencies are required by law to send you a validation notice within five days. The notice must tell you how much money you owe, who the original creditor is and what to do if you don’t think you owe the money.

Once you receive the validation notice, send the collection agency a Cease and Desist Notice. An attorney could write such a notice for you. The consumer can hire an attorney and refer all phone calls to the lawyers.

When the collection agency receives the certified Cease-and-Desist letter, it can’t contact you except for two reasons: First, to let you know it received the letter and won’t be contacting you again and second, to let you know it intends to take a specific action against you, such as filing a lawsuit.

Sending a certified letter to the collection agency doesn’t mean you no longer owe the money. It simply means that the collection agency will have to take another route to get paid.

Can Debt Collectors Call You at Work?

Debt collectors can call you at work, but there are specific limitations on the information they can obtain and a simple way for consumers to stop the calls.

If your employer does not allow you to receive personal calls at work, tell the debt collector that and he must stop calling you there.

When debt collectors call your employer, these are the limitations they must abide by:

  • They can’t identify themselves as debt collectors or say that you owe a debt. If they do, they have violated your rights and you could contact an attorney to file a complaint.
  • They may ask for your contact information, meaning your phone number and address and verification of employment. They can’t discuss the debt with your employers or co-workers.
  • If the debt collector has won a court judgment against you that includes permission to garnish your wages, they may contact your employer. The employer can’t fire you for one wage garnishment, but could fire you for multiple garnishments.
  • If the debt collector calls repeatedly at work to harass, annoy or abuse you or your co-workers, document the time and date and contact an attorney to discuss your rights.

It’s possible the debt collector called your office by mistake because they were given the wrong contact information. If this happens, inform them that you are not permitted to take calls at work and follow up with a certified letter to reinforce the point. They must stop calling.

If they continue to call you at work, write down the time and date of the calls and present them to a lawyer, who could bring a suit against the collection agency and recover damages for harassment.

What If They Continue to Call?

It is tough to define exactly how many calls from a debt collector is considered harassment, but keeping a record of calls helps to make your case. Documentation is always a good way to begin the process of stopping harassment calls from debt collectors.

Hiring a lawyer or sending a certified letter to the collection agency should stop harassing phone calls, but there is plenty of evidence that it does not always work.

One reason is that collection agencies can resume contacting you if you don’t respond to the validation notice they send after the first call. Consumers have 30 days after receiving the validation notice to tell the collection agency that they don’t owe the money or ask for verification of the debt.

If a collection agency sends verification of the debt (e.g. a copy of the bill), it may resume calling you.

By then, it’s time to notify the collection agency that you have a lawyer or send a cease-and-desist letter, but even then, the phone may keep ringing.

Your next action could be to file a complaint about the debt collector’s violations with the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB) and your state attorney general’s office. Be prepared with information about the debt collection company, dates of interaction and the amounts of money involved, what happened, what you have done, and what a fair resolution might be. You may be asked if you have paid any money and how much, as well as steps you’ve taken and what a fair resolution would be.

Can You Sue Debt Collectors for Harassment?

If, after filing a complaint, you may choose to sue the debt collector. If you suffered damages such as lost wages, the goal of your lawsuit should be to collect damages. If you can’t prove any monetary damages, you still may be awarded up to $1,000 in a lawsuit.

Keep in mind that a collection agency also can sue you to recover the money you owe. Although the law regulates the behavior of debt collectors, it does not absolve you of paying your debts. Don’t ignore a lawsuit summons, or you will lose your opportunity to present your side in court.

If you plan to sue for harassment, it is best to have a log that details your complaints with collection agencies and the times they violated the FDCPA.

That means writing down the day, time and a summary of the exchange each time you are contacted by a collection agency. It would help if you recorded the phone calls, though laws in most states say you must advise a caller before recording them.

It also is advisable to save any voicemail messages you receive from collection agencies as well as every piece of written correspondence. Let the collection agency know you intend to use the recordings in legal proceedings against them.

Dealing with the Original Creditor

One way to avoid legal action is to send your complaint directly to the original creditor or debt collection agency and ask them to negotiate a settlement. In some cases, they may cancel the debt to avoid a court hearing.

They also might offer to reduce the amount they will accept in order to settle. If so, make sure the offer is in writing and specifies the exact amount to be paid. Also, request that the settlement offer include a promise to remove the bill from your credit history so that it no longer has a negative impact on your credit score.

Don’t ignore debt collectors, even if you believe the debt is not yours. The debt collector could sue you and win a judgment that will cost you more time and money.

The best solution may be to step back from the adversarial relationship with the debt collection company can find common ground with original creditor. Solutions could include:

  • Repayment plans – Organizing debt into a more realistic payment program benefits the company as well as the consumer.
  • Credit counseling – These (often non-profit) companies train counselors to help find alternative ways of resolving debt.
  • Loan workouts – Similar to repayment plans, loan workouts are alternative arrangements to repay loans that are in danger of default.
  • Disputing charges – If you incurred a debt, you are obligated to pay it. But if you didn’t incur the debt, and you are being wrongly charged, you may be able to prove that and resolve the situation.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

Sources:

  1. Kliff, S., Sanger-Katz, M. (2021, July 20) Americans’ Medical Debts Are Bigger Than Was Known, Totaling $140 Billion. Retrieved from https://www.nytimes.com/2021/07/20/upshot/medical-debt-americans-medicaid.html
  2. N.A. (November 30, 2021) How often can a debt collector call me? Retrieved from https://www.consumerfinance.gov/ask-cfpb/how-often-can-a-debt-collector-call-me-en-2110/
  3. N.A. (April 19, 2022) Debt Collector (Creditor) Cease and Desist Letter. Retrieved from https://eforms.com/cease-and-desist/debt-collector-creditor/