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Unfair Business Practices Involving Debt Collection

Under federal Fair Debt Collection Practices Act (FDCPA), debt collectors and credit companies are prohibited from engaging in abusive behavior to harass and humiliate consumers.

FDCPA prohibits debt collectors from doing the following activities:

• Use obscene and profane language
• Claim more than the amount a person owes
• Claim to be someone else they are not (e.g. collectors telling consumers they are lawyers)
• Contact consumers at work without their permission
• Call consumers without identifying themselves as bill collectors
• Call people at unreasonable time (courts interpret 8 am to 9 pm as unreasonable time to contact consumers)
• Threaten people that they will be imprisoned
• Threaten to use violence
• Send a letter that greatly resembles a legal document
• Demand unauthorized fees and interests

Recourse for consumers

In case the debt collectors violate the provisions in FDCPA, consumers can have several options to stop the abusive and unfair credit collection activities.

1. Tell collectors to stop
   
   Under federal law, consumers have the right to tell debt collection agency to stop contacting them, even though the latter is not doing anything illegal. Through a letter, they can tell companies to cease all communications with them.
   
   After this, debt collectors should stop contacting or sending letters to consumers, unless they want to send a letter notifying that the latter will be sued.
   
   Meanwhile, Los Angeles lawyers advice people not to hide from debt collectors or ignore them. Ideally, people should negotiate with credit companies to come up with an arrangement that will make it easier for them to pay.


2. Document illegal activities
   
   If debt collectors violate the FDCPA provisions, consumers should write down all the illegal activities and the name of anyone who witnessed it. If possible, consumers should be accompanied by another person during all future dealings with the debt collectors.
   
   In some states, consumers can record their conversation without the knowledge of debt collectors. However, doing this is considered illegal in some states.


3. File a complaint before the US Federal Trade Commission (FTC)
   
   Consumers can file their complaints before the FTC if they believe that their debt collectors are doing some illegal activities.
   
   When filing a complaint, people should include the debt agency’s business name and address, the name of the collector, and the names of witnesses.
   
   Complainants should also give the supporting documents and the recorded conversation to the agency.
   Meanwhile, it is important to notify the debt collectors about their pending complaints.


4. File a lawsuit against the debt collector
   
   If a debt collector continues to abuse and harass a consumer, the latter can file a lawsuit.
   
   In case the consumer wins in his lawsuit against a collection agency, he may receive awards to compensate for the losses (e.g. cost of therapy after a person suffered from stress). However, he is still obliged to pay the money he owes to the credit company.

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