Credit Insider Guide to three laws of credit repair
There is more to credit than the Fair Credit Reporting Act.
Legal basis: the FDCPA.Historically, so many collection agencies proved to be such scoundrels (and of course there were exceptions) that the Fair Debt Collection Practices Act was enacted to protect ordinary people from their wiles. Collectors were so cunning that they would sometimes disguise themselves as old friends, or they would take an opposite tack and threaten debtor's jail, thankfully only an imaginary purgatory for alleged deadbeats. For those reasons and worse, the FDCPA details how collection agencies can and can't ply their trade.
If it wasn't for this Federal statute, debt collectors could harass you day and night. They could awaken you by morn, and they could tuck you in at night. They could speak with your neighbors, your boss, your mother, or anybody else. They could lie and insinuate pending legal action. They could even pretend to be some official agency acting on behalf of your creditors.
Hey, wait a minute -- they do those things anyway sometimes! So isn't the FDCPA just a farce? Are we just helplessly held hostage to the whims of these abusive collectors? Unfortunately, too many consumers have resigned themselves to that attitude. Fortunately, the FDCPA allows you to carefully document such abuses and then turn table and take control of such situations. Perhaps even better than that, the FDCPA allows you to demand proof that a collector even owns an alleged debt.
Here we'll briefly review your federally-guaranteed civil rights as delineated by the FDCPA.
In a nutshell, the statute:
- Provides behavioral standards for acceptable third-party collections behavior. For example, collection agencies are prohibited from contacting consumers at "unusual" times, generally considered to be between 9 p.m. and 8 a.m. the following morning. They are prohibited from telephoning or writing to debtors at their place of employment if asked to cease such contacts. If a consumer is known to be represented by an attorney, then all communication must be conducted with such counsel.
- Specifies that debt collectors must always include several legal caveats in their dealings with debtors, including such disclaimers as "This correspondence is an attempt to collect a debt." Before the FDCPA, collectors might try to weasel and ingratiate themselves into families for days and weeks at a time -- for apparently completely unrelated reasons like soliciting for the Boy Scouts and the like -- without stating the true purpose of their attempts to forge such relationships. The history of debt collection during the 19th and first two-thirds of the 20th centuries are rife with now-humorous (but not so funny at the time) anecdotes regarding outrageously misleading collection tactics. Such shenanigans are now expressly forbidden. If a CA doesn't state their purpose right away when communicating with a debtor, whether that communication is written or verbal, then they are violating that consumer's Federal civil rights.
- Prohibits CAs from screaming, threatening or actually employing violence, using profanity, misrepresenting their identity, or hinting at possible imprisonment. Neither can CAs specifically threaten legal action unless they fully intend to follow suit expeditiously and then actually do so! As for identity misrepresentation, this includes sending letters that look like official government correspondence, even if the letter doesn't specifically spell out "Office of the Sheriff" for example. The FDCPA seeks to protect you against such nefarious tactics.
- Allows any consumer to formally request that the CA "cease and desist" from communicating with them. Then the collector is legally obligated to follow suit! Of course, the collector is still free to engage the legal system (lawsuits, judgments, liens, etc.) in order to collect any outstanding debt, and they may advise the alleged debtor of the steps they intend to take along those lines.
- Obligates debt collectors to behave in a certain manner when communicating with others. Specifically, they must identify themselves by name but are prohibited from identifying their employer or the reason for their call. So, for example, they may say, "Hi, my name is Joe Collector, and I am trying to locate someone named PsychDoc. May I please speak with him? . . . No, I'm sorry, I can't say specifically the reason for the call as it is confidential, but do you know where or when he might be reached?" However they cannot say, "Hi, I'm with ABC Collections, and I'm trying to reach PsychDoc because he owes Sears twenty-five thousand dollars and nine cents." Incidentally, collectors call such investigative activity "skip-tracing," which really provides a glimpse into their demonstrated mentality regarding consumers: People who owe money are, in their world view, trying to "skip" out of paying their debts and are often treated disrespectfully as a result. Ugh.
- Specifically details a consumer's right to request further information regarding an alleged debt. Such procedures are termed debt validation and are so POWERFUL that we could devote an entire book to the matter. For now, it's important to simply understand that every consumer has the right to challenge the veracity of any debt; a collector must then respond in a certain way, otherwise the collection activity must CEASE and all related consumer reporting must be RESCINDED. Validation, in fact, can become the central tool in a consumer's arsenal when confronting aggressive collectors. You can find additional information regarding validation on a number of consumer law discussion boards. And, as I previously mentioned, Lexington Law utilizes FDCPA validation as part of the array of services they offer.