The following is a guest post from Sergei Lemberg, whose firm represents consumers in matters relating to fair debt collection, fair credit reporting, and lemon law.
Over the past four years, unemployment has soared, housing prices have plummeted, and gas prices have reached the stratosphere. It’s no wonder that an increasing number of people have found themselves on the receiving end of a debt collection call. In its February report, the Federal Reserve Bank of New York estimated that 14 percent of U.S. adults (30 million people) had outstanding debt that was eligible for debt collection.
For many people, the era of the Great Recession represents the first time they have been unable to meet their financial obligations. These consumers often don’t know their rights, and allow themselves to be harassed and intimidated by debt collectors. For their part, debt collectors are ramping up their efforts, seemingly unable to understand the difference between being unwilling to pay and being unable to pay.
If you’ve been contacted by a debt collector, it’s important to understand your rights under the federal Fair Debt Collection Practices Act (FDCPA). The FDCPA outlines illegal debt collector tactics and mandates that third-party debt collectors (as opposed to original creditors) follow certain procedures when collecting a debt. For example, a debt collector can’t call you early in the morning or late at night, and can’t call you at work if you’ve told him that you’re not allowed to take calls at work. He can only call a third party (such as a relative or neighbor) to try and obtain contact information for you; he can’t reveal that you owe money or that he’s attempting to collect a debt.
Within five days of first contacting you, a debt collection agency must send you a written notice outlining the amount you owe, the original creditor, and your right to dispute the debt within 30 days. If you don’t believe the debt is yours to pay, you must dispute it. Otherwise, the law says that the debt collector can assume it’s valid. If you do dispute the debt, the debt collection agency can’t contact you again until they’ve provided you with proof that the debt is yours.
During the collection process, a debt collector isn’t allowed to intimidate or harass you, and isn’t allowed to threaten an action that he doesn’t intend to take. So, for example, he can’t threaten to take you to court unless the collection agency actually plans to do so.
At any time during the debt collection process, you can send a debt collector a “cease and desist” notice through the mail. After receiving the notice, the debt collector isn’t allowed to contact you again except to notify you that they are no longer going to attempt to collect the debt or that they are pursuing legal action. If the debt is yours to pay, you’ll still owe the money, but you’ll no longer be harassed with debt collection calls.
If a debt collector crosses the line and violates the Fair Debt Collection Practices Act – which happens all of the time – you are entitled to sue the debt collector. Because the law says that a debt collection agency that violates the FDCPA has to pay your court costs and attorney fees, a fair debt attorney should take your case free of charge. If a violation has occurred, the law says that you may be entitled to damages of up to $1,000.
The bottom line? It pays to know your rights. Owing money isn’t a crime, and a debt collector doesn’t have the right to shame or humiliate you.
