5 Illegal Debt Collection Practices
We are a long way in time and attitude from debtors’ prisons for those who could not pay their debts. To some, however, debtors’ prisons have been replaced with a similarly onerous and unpleasant institution, known as debt collection agencies. These are private companies who contract with businesses and banks to recover monies owed on many different types of debts ranging from student loans, medical bills, credit card bills, and mortgages. The agencies make their money by recouping as much of the outstanding debt as possible which gives them a huge incentive to do just about anything to get the money. Here are a few of the more egregious illegal debt collection practices to be aware of.
1) Threats and harassment. Debt collection agencies are prohibited under the Colorado Fair Debt Collection Practices Act (Colorado FDCPA) from making threats against a consumer including to their person, reputation, or property. Debt collection agencies are also prohibited from harassing consumers by calling them at all hours of the day and night, including repeatedly calling with the intent to annoy or harass, using profane or abusive language, hiding the identity of the call to trick the consumer into answering the call, and publishing a list of consumers with outstanding debt.
2) Seek to withhold treatment until payment. In this day and age of skyrocketing healthcare costs, it’s no surprise that a large percentage of the population are in debt due to medical bills. There has been a trend recently of debt collectors from hospitals requiring that patients pay their outstanding bills before they are allowed to be treated as well as mining their medical records for information to get payments. Not only do these practices violate the Fair Debt Collection Practices Act, they could also violate the Health Information Portability and Accountability Act (HIPAA) regarding patient privacy.
3) Contacting you or your spouse after you have told them to stop. A consumer is allowed to send a letter to the debt collection agency demanding that they cease contacting them regarding their outstanding debt. Per the Colorado FDCPA, the debt collection agency must abide by the letter and can no longer contact the consumer. Of course, this doesn’t mean that the collection itself will stop.
4) Making stuff up. Unfortunately, this is a thing with debt collectors and it is not uncommon. Examples of false statements include misrepresenting the amount and status of the debt, misrepresenting the repercussions of failure to pay the debt, implying to or informing the consumer that they have violated a law or have acted badly, and implying that the debt collection agency is either affiliated with a government or credit reporting agency.
5) Working unfairly. Beyond misrepresenting, debt collection agencies also act in an unfair way. Specifically, they may collect more money than what is allowed by the credit agreement, threaten to or actually deposit a post-dated check before its stated date, or taking property when there is no legal right to do so.
Carolyn Duncan has seen these tricks at work and knows how to counsel clients in dealing with debt collection agencies. Moreover, her firm also handles debt negotiations which can allow you to resolve outstanding debts for pennies on the dollar and avoid the stigma and expense of bankruptcy. Contact the firm today to discuss your options.