Debt collectors use many sneaky tricks to try to force consumers to pay them money. After all, as I’ve often said, debt collectors generally know that the people they’re looking for don’t have much or no money to spare. Collectors therefore compete with each other for whatever you can get your hands on. This puts incredible pressure on collectors to harass you more than other collectors. And this, in turn, has made it extremely difficult to get rid of certain practices, terrible as most people have long agreed they are. Here are four of those tricks and the sections of the Fair Debt Collection Practices Act that apply to them.
embargo threats
Consumers often complain that debt collectors threaten them with imprisonment, humiliation, or seizure of their bank accounts or wages. Under 1692e(4) these threatening spells are illegal. Debt collectors may not threaten imprisonment because they do not have the power to take such action, and a claim that failure to pay a debt will result in seizure, attachment, garnishment, or sale of any property or wages unless such action be lawful. Y the debt collector or creditor intends to take such actions. 15 USC Sec. 1692 (4). Debt collectors are often vague in their threats, straining to speak terrifies the debtor, but could be interpreted to mean something else.
Debt collectors often threaten to garnish the wages of the people they harass. If that happens to you, don’t lose your head. Just ask when and under what circumstances they would do that. If you can, get clear answers and take detailed notes. If the collector refuses to respond, it could show that she was trying to make you believe that such actions could occur without notice or legal process. That would make the action illegal and extremely unlikely that the collector intends to take the action. Both would break the law.
Communicating or threatening to communicate false information
People tell me all the time that debt collectors are reporting debts to credit reporting agencies. They are allowed to do that, but it violates 15 USC Sec. 1692e(8) to not include the fact that the debt is disputed if you have disputed it.
Use of information that appears to come from the courts
Debt collectors (and particularly shady creditors) often used collection forms designed to look like they came from or were somehow approved by the courts in an attempt to scare consumers into paying a debt. I haven’t heard of this being used for a while, but 15 USC Sec. 1692e(9) would make it illegal. A marketing gimmick I still see from time to time, “Federal law prohibits handling this letter before it reaches its addressee”, if applied to a debt collection letter, could violate this provision.
Using a collection letter that looks like a lawsuit
Sometimes debt collectors try to make their letters look like lawsuits, summonses, or other forms of legal action. 1692e(13) makes this illegal.
You don’t have to be deceived
Different courts have used different legal standards regarding how effectively the form should be created. In some jurisdictions, the form is confusing enough to mislead someone. Other courts are a bit stricter: they have to be able to cheat middle-educated people in similar (stressed) circumstances. What the courts have agreed is not necessary is that you actually fall for the deception. Even if you realize the debt collector is saying or doing something illegal, the Fair Debt Collection Practices Act makes it illegal if could have deceived someone. And the reason for this is obvious: the Act is designed to prevent cheating, if it were only applied to people who were cheated, there would be little chance that anyone would apply it to stop the practices.
one last reminder
The FDCPA applies to all unfair debt collection practices by debt collectors, whatever they may be. The actions specified here (and in the law itself) are, of course, illegal in themselves. But they are also illustrative of the kinds of actions that are illegal. So if debt collectors are doing something like these tricks to you, May be breaking the Law even if they are not doing the precise things described here.