Debt Collections. Those two words have probably just made your face cringe. Chances are, if you are reading this, you have dealt with a debt collector at some point in your life. Even people who are good at paying their bills on time have at some point been in debt collections at some point. For example, a collection over a medical bill or service that you were unaware you even had a bill for. How about when you moved, you turned in that cable box, or paid that last bill for electricity, but then months or years later you discover a debt collection on your credit report for that cable box you “forgot” to turn in, or for that last electricity bill you “forgot” to pay. Did you know that a debt collection could be worth $1,000 or more? Keep reading because we are going to show you why, and also what you can do to stop those harassing phone calls and embarrassing letters. We will also show you how you can have the debt collectors paying you, rather than you paying them, holding them accountable.
The Laws Regarding Debt Collections
The FDCPA is the federal law regarding debt collections. In the past before this law was enacted, debt collectors did many slimy things to try to get money from consumers. Things like threatening prison time, wage garnishment, calling your neighbors or your
workplace. Ever seen or heard the phrase “This is an attempt to collect a debt, and any information obtained will be used for that purpose”? This was a result of the FDCPA. Of course, with federal law, an agency within the federal government is tasked with enforcing the law and coming up with regulations to further define and enforce the law. The FTC and CFPB are the government entities tasked with enforcing the FDCPA. Violations of the FDCPA can cost the debt collectors up to $1,000 each violation plus attorney’s fees. This means you don’t have to pay a consumer protection attorney a dime to represent you, and you get up to $1,000 for each violation the debt collector commits. Violations can be something as simple as the envelope the debt collector uses, making it easy for anyone to tell that letter came from a debt collector, to contacting you after telling them to stop. We are going to show you some common FDCPA violations, and tell you how you can hold them accountable.
Debt Collections Agencies Rely On Consumer Ignorance
Ignorance is bliss so they say, at least for debt collectors. Many debt collectors rely on consumer ignorance to scare or intimidate you into paying your “debt”. Although the law clearly states they cannot make false claims like jailtime or wage garnishment.
Another aspect of debt collections deals with credit reporting. Debt collectors are not allowed to report anything that is false, or known to be false to the credit bureaus. Sometimes debt collectors will report false information to the credit bureaus, such as balance information, or a different date of first delinquency in order to keep a debt reporting longer than law permits. The most common offence is failure to mark their tradeline on a credit report disputed when you dispute the debt. Why is that? The credit scoring models do not put as much weight on a disputed tradeline, which results in a slightly improved credit score. Debt collectors want to do as much damage as they can to your credit to get you to pay them. Amongst other things, debt collectors will pull out all the stops to try to collect that debt such as constant calls, calls to your job, or other family members. One of the biggest violations debt collectors do is contacting you after you have told them not to contact you anymore, or that you refuse to pay them for that debt. In my article about the credit bureaus ignoring consumer disputes, I discussed how the credit bureaus process dispute letters. Debt collectors process disputes and letters in much the same manner due to the volume. These processors spend maybe 2 minutes tops to process these letters. Likely they will respond with a generic form letter that doesn’t address the nature of your dispute, or even better skip over your refusal to pay or do not contact order and send the same generic form letter, guess what….that’s a violation!
Here is a list of common fDCPA violations
- Any letter in an envelope where you can tell it came from a debt collector.
- Failure to mark a disputed debt on your credit report.
- Marking a debt disputed when isn’t disputed.
- Harassing/Threatening Language
- Reporting false information on your credit report.
- Contacting you during prohibited hours.
- Not sending a proper Dunning Notice with proper disclosures and instructions for disputing within 5 days of sending any communication. (Regulation F)
- Leaving a voicemail on a shared voicemail. (Regulation F)
- Calling family members, neighbors, your work and disclosing they are a debt collector looking for you.
- Contacting you after you have told them you refuse to pay or tell them not to contact you.
- And Many More…
Debt Collections: How to hold them accountable
Holding debt collectors accountable for their actions for violations of the FDCPA and regulations by the CFPB is sorely needed. Statistics show that debt collectors so indeed violate the FDCPA quite often. Consumers in large part are unaware of their rights under the FDCPA.
Discovering violations and can be tricky, but there is help out there. A good consumer protection attorney can help, and also a good credit repair company can help as well.
Credit wellness solutions introduces debt collection audit service
In order to change how debt collectors treat consumers, we MUST fight back and hold them accountable. If it hits them financially it will help them clean up their act for all consumers. That is why we at Credit
Wellness Solutions are launching our new Debt Collection Audit Service. For a 1 time fee we will audit all of your current collection accounts, reporting or not reporting on your credit reports for 2 years. Of course any new collections that pop up during the contract period, we will audit them. We will look for any violations and if we find any violations, for a small document processing fee per account, we will send your file to our extensive, 50 state, network of consumer protection attorneys to hold the debt collectors accountable. From there, you may be entitled to up to $1,000 per violation. If the accounts are reporting on your credit and get deleted as a result of the lawsuit, there is a fee of $50 per deletion, per bureau. If we don’t find any violations in our initial audit, we may audit the collector further by communicating with them. Also, if the accounts are reporting on the credit report, we will attempt up to 3 rounds of removal disputes ($20) per communication. This process may also turn up violations. If we are successful in getting the collections off your credit report the deletion fee is $50 per deletion, per bureau, even if the deletions are a result of litigation. If a client elects, this service is also included in all of our credit repair packages (monthly or pay per deletion). To learn more about this service, visit our website, or schedule a FREE consultation.
