Fair Debt Collection Laws – An Overview

Article by Peter T. Roach

Fair Debt Collection Laws – An Overview – Business

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“The main law a creditor must comply with when collecting a debt is the Fair Debt Collection Practices Act (FDCPA). Congress enacted this law in 1977 to protect the interest of debtors.

The Purpose of the FDCPA is to:

1. Eliminate abusive, deceptive and unfair debt collection practices

Debt collectors may not call you to collect a debt at inappropriate hours of the day, use inappropriate language or lie when speaking to a debtor.2. Make sure that debt collectors who do not use abusive debt collection practices are not at a competitive disadvantage

Previously, if debt collection firm “”A”" wanted to use good practices to collect debts by not abusing debtors, they might collect less debts than debt collection firm “”B”" who did abuse the debtors (i.e., using threats). So, someone who wanted to collect a debt would have been more likely to hire firm “”B’ who had a better track record in collecting debts, even though firm “”A”" is using better practices by not abusing debtors. This law prevents that competitive disadvantage that firm “”A”" would have against firm “”B.”" 3. Encourage similar State laws that protect consumers against debt collection abuse.

Passage of the federal laws encourage New York City to pass even more stringent laws against debt collection abuse.Who Does the FDCPA Apply To?

FDCPA applies only to third parties who are acting on behalf of a creditor. The FDCPA does not apply to first party creditors or lenders collecting their own debts. Even if you are a single person collecting a debt on behalf of someone else, and you are not in the business of collecting debts on a regular basis, you should probably take steps to follow the FDCPA to avoid any unnecessary claims against you.

However, if a creditor collecting his/her own debt harasses or threatens the debtor he/she may be charged with a criminal act under State penal laws. This includes both acts of physical violence and a threat of criminal prosecution against the debtor.

For example, if a debtor does not pay his debt, and the creditor uses threats of physical violence against the debtor in an effort to collect his debt, the creditor may be charged with committing a criminal act.

Also, if a debtor commits an illegal act or fraud in order to obtain a loan or financing, and the debtor does not pay the creditor, the creditor cannot threaten to report, or report the debtor’s underlying criminal act to the authorities.

There is one exception that creditors need to watch out for. If you use an assumed name or pretend to be a debt collector in order to collect your own debt, then you have to comply with the FDCPA.”

About the Author

Peter T. Roach is a New York collection attorney, who enforces creditors’ rights throughout the state of New York. To receive expert advice on collecting debt, visit http://www.roachlawfirm.com or call Peter T. Roach & Associates, P.C. at 1-800-824-0284.

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Florida Debt Collection Laws require valid registration by debt collection companies

Under the Florida Fair Debt Collection Practices Act (FFDCPA) 559.553, consumer debt collection agencies must be registered.

Florida debt collection laws require debt collection agencies to be duly registered to engage in debt collection business in the state. These companies are requires to maintain a proper valid registration to do business in Florida. This statute came into existence from January 1, 1994 that demands each consumer collection agency in the debt collection business in Florida to renew registration annually (FFDCPA 559.555)

Registration by debt collection should be complete in all respects and applicable registration fee should be paid. The registrar’s office may reject an application by a prospective registrant if the registrant or any principal of the registrant held a professional license or state registration and that was revoked or suspended and was not explained by the registrant.

Not explaining the revocation or suspension to the satisfaction of the registration office or after a notice from the office attracts a rejection of the application. Such rejection is informed to the debt collection company.

This registration process is not applicable to any original creditor trying to collect debt or a member of the Florida Bar. This process is also not applicable to financial institutions authorized to do business in the state or their subsidiaries, real estate brokers, insurance companies authorized to do business in the state or any consumer finance company and wholly owned subsidiary thereof. This registration process also exempts out of state consumer debt accounts for collection from creditors with business presence in Florida and FDIC insured institutions.

Those debt collection companies not exempt from registration would be subject to enforcement by the state as specified in section 559.565.  

The registration of consumer collection agencies requires furnishing the following to register:
A registration fee of 0 to be deposited by the office to the credit of the Regulatory Trust Fund office
Registrant shall provide the business name, trade name, current mailing address, current business location and full name of the principal of the registrant
A statement clearly detailing facts about holding any registration held by registrant, principal of registrant, or by any business entity in which any principal of the registrant was the owner
A former registration in which registrant or principal of registrant owned ten or more percent of such business
If the registration held by the registrant was the subject of any suspension or revocation

Renewal of old registrations is done between October 1 and December 31 of each year. There shall be no delay of the fee for any registration.

A review of the elements involved in a debt collection lawsuit by Florida consumer defense attorney Patrick Vincent. Visit his office at www.cedolavincent.com or call 866-475-DEBT (3328).
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Correct debt collection laws should be followed for student loan debt collection

Article by Safinajones

Higher education has become very expensive and not everyone can afford it. As a result, many students have to leave their studies mid-way as they cannot bear the expenses that are related to higher studies. This is the reason that student loans were started by the government as well as by private financial companies and banks. These loans are readily available and students can now complete their desired studies. However, the problem starts when students are not serious about repaying the loan amount. In many cases, the loans get into a default state, which can lead to various kinds of problems. In such situations it is best to get student loan debt help.

There are federal student loans and private student loans available to the students. Both have their positives and negatives. Though federal loans are difficult to get, but they are more flexible and it is difficult to default on them. On the other hands, private student loans are easy to get, but one mistake in loan repayment can take your loan to a defaulted status. Private companies and banks also start chasing the customer like hell if they fail to make loan repayments on time. Though there are debt collection laws that need to be followed while collecting the loan repayments, debt collectors often forget that. If a candidate feels that he is being harassed, he can seek student loan debt help from professionals.

There are many do’s and don’ts that are integral parts of debt collection laws. Any debt collector who goes to the candidate to collect debt must follow these. In case they are not followed and the customer feels harassed and disturbed, he can file a case against the debt collector or the debt collection agency. It might lead to several steps against the agency or the collector and their licenses might also be cancelled. When the loan defaulter sees that the entire situation is getting out of hand, he should immediately contact a professional for student loan debt help so that severe consequences can be avoided.

Every candidate who takes a loan for any purpose should have fair knowledge regarding the various debt collection laws. This will help him/her in knowing his/her limitations. Not only that, if a debt collector harasses the person in the wrong way, he/she can protest against it and if required take professional assistance as well. However, it is best if such situations can be avoided by making loan repayments on time.

Find More Federal Debt Collection Law Articles

Understanding Debt Collection Laws

Debt collection laws have changed, thanks to the Fair Debt Collection Practices Act. Now, collection laws aren’t one-sided, but instead give consumers a way to fight back against bill collectors who would cross the line in an attempt to collect a debt. So many bill collectors work on a contingency basis, which means that they don’t get paid unless they collect, and that can make them take actions in their collection efforts that are against collection laws.

If you’re dealing with a collection agency employee, and aren’t sure if he’s following debt collection laws, here’s a general overview of the Fair Debt Collection Practices Act.

* Any time a bill collector contacts you, he or she must identify himself or herself as a collector. They aren’t allowed to pretend to be anyone else, such as law enforcement, an office of the court, or an attorney.

* According to collection laws, a debt collector must tell you in their original contact letter that you have 30 days to dispute the debt.

They must also tell you that unless you do so, they have the right to assume that the bill is valid.

* If you dispute a debt, the collection agency isn’t allowed to continue their efforts to collect the money until they have proven the debt is yours to pay. If they do, they are violating the established debt collection laws.

*If the debt is disputed, it will be the collector’s responsibility to prove that the debt is yours. They must provide you with original paperwork that shows you agreed to pay the debt to the original creditor.

* If it’s established that the debt is yours, the debt collector cannot speak to anyone about the debt except you and, in some states, your spouse.

If they call a third party to try and locate you, they aren’t allowed to tell them that they are calling about a debt. What’s more, if you hire an attorney, the collection laws state that debt collectors can only communicate with your attorney from the date you notify them about it.

* When dealing with a collection agency, they aren’t allowed to talk to you in a way that demeans you, belittles you, or humiliates you. They aren’t allowed to threaten you or attempt to bully you into paying your debt.

* A collector isn’t allowed to contact you at work if you tell them, in writing, that you’re not allowed to receive phone calls there.

* Debt collection laws state that a debt collector can’t call you before 8AM or after 9PM in your time zone. In addition, they aren’t allowed to make repeated calls in an attempt to harass you.

* If you don’t wish to communicate with a collector, you have the right to tell them so. Send them a cease and desist letter via certified mail with a return receipt requested and tell them that you no longer wish to communicate with them, and according to collection laws, they must stop. That doesn’t mean that they have to stop attempting to collect the debt, but they won’t be able to contact you unless they do so to tell you that they are stopping their collection efforts, or are taking legal action to collect the debt.

Fair Debt Collections Act

The Fair Debt Collections Act is actually a foreshortened version of a federal law called the “Fair Debt Collection Practices Act”, often abbreviated as the “FDCPA.” The exact name of the law of course is not all that important. What is important is the protection offered to consumers by the FDCPA.  In essence, this law provides protection against harassment and abuse by debt collectors.

Fair Debt Collections Act – Protections

The law was created to prevent debt collectors from using old school, old world tactics for collecting debts. I’m talking about the stereotypical strong-arm debt collection tactics like making mob-style threats to induce you to pay, claiming to have you arrested if you don’t pay, or claiming to sue you. (A debt collector i.e. collection agency, cannot sue you over a debt – only the original creditor can sue you.) And keep this in mind; Verbal abuse, and generally any form of debt collector harassment, is strictly prohibited by the Fair Debt Collections Act.

Fair Debt Collections Act – Provisions

Many people are unaware that this law actually exists, and of the protections it offers them.

There is actually a tightly defined code of conduct that debt collectors have to abide by in the course of carrying out their debt collection efforts. Besides those already mentioned, did you know that debt collectors may not call you outside of the hours of 8 a.m. to 9 p.m. in your local time zone? And one of my personal favorites: debt collectors may not call you at all, at home or at work, if you tell them not to. In other words, the FDCPA provides a cease and desist provision for consumers.

This is going to music to the ears of anyone experiencing excessive calls, threats, and demands for payment on their home, mobile, and office phones all day long.

The rationale behind this provison of the Fair Debt Collections Act is simply that you have the right to tell debt collectors that you do not want to communicate by phone with them and that they must put all communication in writing – and they must comply with that request, by law.

Another great provision of the Fair Debt Collections Act is that when you document a debt collector violating any aspect of the Fair Debt Collections Act (i.e. record them engaging in verbal abuse, or keep records of phone calls received outside of acceptable hours) you can sue the debt collector for 00 per violation. That can add up quick, and the debt collectors know it, which is why having a working knowledge of this law can provide you with immense power to stop debt collector harassment.

Your Bank’s Unfair Debt Collection Practices

Your bank, lender or loan servicer is probably violating the Fair Debt Collection Practices Act all day and every time their employees or representatives contact you about your loan during the foreclosure process or loan modification efforts. Did you ever think about that?

The FDCPA was created in response to abusive conduct by collection agencies and concern that the abuses were causing an increase in the filings of personal bankruptcies. The purpose of the Act is to provide strict guidelines for collection agencies which are seeking to collect legitimate debts – while providing protections and remedies for debtors who may be subjected to illegal conduct.

The FDCPA applies to all personal, family, and household debts, including but not limited to first and second mortgages, car loans, medical bills, and credit card accounts. In addition to the FDCPA, most states have parallel laws, which typically prohibit the same types of abusive debt collection (and which may cover even a broader range of debts than the federal law.

Under the FDCPA, a “debt collector” is defined as any person or entity that regularly collects debts owed to others.

This definition includes law firms who represent banks in foreclosure proceedings and perform debt collection services on a regular basis. Even where a debt is fully legitimate, a debt collector’s conduct is still restricted by this law.

Normally, “in house” collection agents are not covered by the Act. For example, if a consumer has a store credit card, and the store’s own collection department contacts the consumer, the FDCPA does not apply (however, if the same store uses a third party collection agency to contact the consumer with regard to the same debt, the third party’s conduct is restricted by the FDCPA). Similarly, when a mortgage becomes delinquent, the original lender or owner of the loan may be exempt from the Act if the lender is: (1) Collecting on its own debt; (2) Acting under its own corporate name; (3) Not engaged primarily in the business of collecting debts.

However, in the case of the mortgage lending business over the past decade, a vast majority (if nearly all) loans are sold once they go into default. Accordingly, the FDCPA applies anytime a mortgage loan is sold or transferred and another servicer begins debt collection attempts either prior to, or after commencement of foreclosure. Once a lender or servicing company “changes” after a loan goes into default, the “new” company which purchases the debt is considered a “collection agency” and must comply with all provisions of the law. And as noted above, any law office hired by a lender to pursue the debt or initiate foreclosure proceedings must also comply with the FDCPA and may be held responsible for any failures.

Examples of conduct specifically prohibited by the FDCPA include the following:

• Contacting a third party who is not responsible for the debt, such as a relative, neighbor, or employer (co-signers, however, may be contacted by the debt collector);
• Threatening to refer an account to an attorney, harm a consumer’s credit rating, or begin repossession or garnishment – without actual intention of carrying out the threat. (However, a collector may warn of an actual impending intention to refer a case to an attorney or to report a debt to a credit agency. What they cannot do is use a false threat to try to intimidate a consumer into paying;
• Making repeated telephone calls at unreasonable times. The act defines “unreasonable times” as contact before 8:00 AM or after 9:00 PM – unless the consumer has given the debt collector permission to make calls during those hours;
• Placing telephone calls to an inconvenient place (This includes calling a consumer at work in violation of a policy by an employer that is known to the debt collector, or following a request by a consumer that they not call the consumer at work;
• When placing a telephone call to a consumer at work, informing the employer of the purpose of the call, unless first asked by the employer;
• Using obscenity, racial slurs or insults;
• Seeking collection fees or interest charges not specifically permitted by contract or by state law;
• Requesting post-dated checks with the intention to prosecute if they bounce;
• Suing in courts far removed from the consumers place of residence;
• Making fraudulent representations such as falsely claiming that the debt collector is an attorney; falsely claiming to have started a lawsuit; using a false name, or using stationery that is designed to give a false impression of a communication from a Court or Official Government Agency;
• Using false pretenses to collect information about the consumer such as pretending to be conducting a survey; and
• Threatening the consumer with arrest if the debt remains unpaid.

Additionally, once a debt collector is informed that a consumer is represented by a law firm or individual attorney, the debt collector must immediately cease all communications with the consumer. (Note: This particular section is being violated frequently by many of the lenders and servicers with which our office has been dealing. Typically, the lender/servicer is acknowledging receipt of our correspondence, but continues to contact the client and demand repayment of the subject loan. Our office is addressing these practices aggressively in current correspondence).

Violation of these and other sections of the FDCPA can subject a debt collector to monetary damages and an obligation to pay the consumer’s attorneys’ fees. Also, the Federal Trade Commission can enforce the FDCPA through “administrative action”, including the issuance of “cease and desist” orders and injunctions.

Surprise, you may be the victim of a lender or servicer that is violating the FDCPA in your loan modification efforts and foreclosure defense matters. Review your correspondence, think about who has been calling you and stand up for your rights.

Debt Settlement Versus Debt relief In Texas

Managing debt and debt settlement are two possible debt solutions that will help if you’re having debt related problems caused by several unpaid debts and loans. When it comes to these options, a lot of people get confused between settlement and debt relief. In case you select loan settlement or perhaps is it safer to select the debt relief option.

Debt management involves finding a debt relief company that will help you negotiate with your creditors in a bid to cut back the terms and interest rates of one’s loans to learn effectively for you to repay debt. Loan settlement alternatively involves finding a loan settlement company to assist you negotiate along with your creditors to lessen the debt that will help you repay the debts faster.

Settlement offers a number of advantages over managing debt especially if you reside in Texas. The reason being with the Texan laws regarding debt collection, that are so debtor friendly. These laws offer a lot of protection to debtors and make loans settlement a really admirable option.

For instance, in other states, when you will decide to obtain a settlement company involved, creditors will usually hound you with calls and harassment to cause you to repay the full amount. In Texas and Florida, that’s illegal. As soon as you notify your creditors with a Power of Attorney or Cease and Desist document to exhibit that a loan settlement company is now involved, it might be illegal for them to contact you. By legal rights, you thus should not receive calls or any kind of harassment when a settlement company gets involved.

Another advantage of considering loan settlement in Texas is always that the debtor’s wages and house is also protected by Texan law. In other states, a creditor can opt to not settle and seek legal intervention to claim the entire quantity of the credit. When the creditor wins the truth, they are able to aim to garnish a percentage of the debtor’s wages or put a lien around the debtor’s property. Wage garnishing involves contacting the employer to deliver a percentage with the debtor’s monthly income straight to the creditor. By Texas law however, a debtor’s wage can’t be garnished unless the debtor authorizes such in addition to their properties are 100% lien protected.

It really is thus clear that Texas law regarding commercial collection agency and settlement is very debtor friendly. It can make settlement an increasingly more attractive solution. Creditors understand these laws and are thus more inclined to pay a settlement agreement. By using these an arrangement, you simply cope with the settlement company, when they handle your creditors. Debt Settlement can assist you get as much as 40 to 60% loan reduction.

Fair Debt Collection Practices Act

Here are a list of Abusive and Deceptive Guidelines for the Fair Debt Collection Practices Act:
The Act prohibits certain types of “abusive and deceptive” conduct when attempting to collect debts, including the following:
•Hours for phone contact:
ocontacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time
•Contact after being asked to stop:
ocontacting consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further contact or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted
oContacting consumers at their place of employment after having been told verbally or in writing that this is not acceptable
oContacting consumer known to be represented by an attorney
oContacting consumer after request for validation: contacting the consumer or the pursuing of collection efforts by the debt collector after receipt of a consumer’s written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor’s name and address
•Misrepresentation or deceit:
omisrepresenting the debt or using deception to collect the debt, including a debt collector’s misrepresentation that he or she is an attorney or law enforcement officer
oPublishing the consumer’s name or address on a “bad debt” list
oSeeking unjustified amounts, which would include demanding any amounts not
permitted under an applicable contract or as provided under applicable law
oThreatening arrest or legal action that is either not permitted or not actually contemplated
oAbusive or profane language used in the course of communication related to the debt
oContact with third parties: revealing or discussing the nature of debts with third parties (other than the consumer’s spouse or attorney) or threatening such action
oContact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business
oReporting false information on a consumer’s credit report or threatening to do so in the process of collection

For many people, the cold call from the bill collector is an intimidating and even humiliating experience. They are unprepared to deal with these collectors who are trained to handle every type of response. Relentlessly assertive, collectors focus on “the close” — your commitment to pay.
The less knowledgeable you are about your rights, the more confident a collector becomes. The more worried you are, the less concerned the collector becomes. Collectors know that it’s easier to manipulate a conscientious debtor into a payment plan that benefits the collector, not the debtor.

Find More Fair Debt Collection Practices Act Articles

Commercial Debt Collection

Many business owners have great difficulty when it comes to commercial debt collection.  Debtors can avoid paying easily; and, without a clear strategy in place for collecting payment from debtors, they may not have sufficient reason or motivation to feel that paying their debt is the best option.  With an effective strategy for approaching your debtors in place, you can greatly impact a debtor’s decision to pay. 

Unfortunately, a major hurdle that many businesses struggle to overcome is the lack of a comprehensive, yet streamlined approach that yields a high rate of debt recovery.  The problem is that the process of collecting debt can be quite complicated.  Knowing when, how and what to do when it comes to approaching debtors can be difficult for anyone without knowledge or experience at collecting debt. 

With commercial debt collection, there are, as with any business process, correct and incorrect methods, time consuming methods and even methods that can create legal problems for your company.  The laws and regulations are not only constantly evolving, but they also can vary for different locations where the debt is being pursued.  It only takes one savvy debtor to identify and report a violation of a debt collection law or privacy law and you can find yourself in a lawsuit or even have files charged against you or your company.  If you are unsure of how to remain compliant while pursuing debtors and avoid repercussions, you might consider contacting a commercial debt collection agency for guidance. 

Developing a safe and effective strategy is key when it comes to commercial debt collections, however, it is not as simple as many people think it is.

In actual fact, commercial debt collection is an art-form that requires knowledge of the process and experience in understanding what motivates different debtor types to pay.

Effective commercial debt collection also involves investigating the debtor company and their officers.  An experienced commercial debt collector will read the debtor to establish what is important to them and what motivates them in order to execute a plan that will generate the most recovery possible.

Commercial Debt Collection – Resources:

Commercial Debt Collection Agency

Commercial Debt Collection Agencies

Understanding Unfair Debt Collections And Your Rights

Are you feeling harassed by the frequent calls of your debt collector at odd hours of the day? If you are, make sure that you know your rights against the unfair debt collection. Understanding your right would help you tackle the matter proficiently. The Fair Debt Collection Practices Act (FDCPA) is a statute included in the Consumer Credit Protection Act, which aims at following:

To eliminate abusive and unfair practices in the collection of debts from the consumers Promotion of fair means of collection Providing guidelines to debt collecting agencies on conducting businesses To provide consumers with an avenue for disputing. Scrutinizing and obtaining information regarding liabilities to ensure legitimacy Determining the consumer rights in dealing with debt collectors Prescribing remedies and penalties in case of violation of the Act

How can you enforce your right?

Getting out of a debt has just got easier and more feasible with the enforcement of the new law by the Federal Trade Commission (FTC).

According to the new amendment, FTC has banned debt settlement companies from collecting upfront fees. This would be good news for people who are staying in Pennsylvania as it has been speculated that this county receives a record number of cases regarding unfair debt collections. Pennsylvania however, is the official location of many good consumer law firms. In case when you are doubtful about the actions of an agency, you should contact a good law firm to determine you have a case and also to tackle the matter on your behalf.

In case you are lending money from any enterprise in Pennsylvania, you should preserve all the documents of the procedure and the payment carefully for future reference.

If possible keep a record of the communication between you and the agency. This would be helpful as references if you get involved in any legal complexities later on. Before filing any case regarding unfair debt collections Pennsylvania County’s law requires you to send a cease and desist letter addressing the debt collectors to stop further communication with you. If still the harassment continues hire a lawyer to fight for your right. An attorney for unfair debt collections in Pennsylvania works in close collaboration with the consumers to stop irritating collection calls and bring back some peace.

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