Stop Debt Collectors

Prohibited Practices

The FDCPA defines a debt collector as any person (1) whose principle business is collecting debts, (2) who regularly collects debt owed to a third party, or (3) who uses a false name in the course of debt collection activities or efforts.⁷ The FDCPA prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting debts. The following are the rules under which collection agencies must operate:

• Debt collectors may contact you only between 8 A.M. and 9 P.M.
• Debt collectors may not contact you at work if they know your employer disapproves.
• Debt collectors may not harass, oppress, or abuse you.
• Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.
• Debt collectors must identify themselves to you on the phone.
• Debt collectors must stop contacting you if you ask them to stop in writing (known as a cease communication letter).
• Debt collectors may call your neighbors, but only to determine where you are and only once.
• Debt collectors may not discuss your debts with any third party unless it’s your attorney, the creditor’s attorney, a credit reporting agency, co debtor, guardian (administrator/executor), or parent (if the debtor is a minor).⁸

In a nutshell, bill collectors from collection agencies cannot harass you by calling late, calling your neighbors repeatedly (or talking to them about your debts), calling your work, or at all! This means that you don’t have to be a victim, and you can take action to see that the harassment stops or doesn’t occur at all. A cease communication letter is a way to get debt collectors to stop contacting you. This is explained in detail later in this chapter.

Threats
One of the most common illegal actions by debt collectors is to threaten legal action. Debt collectors believe they can get away with such threats because debtors often fear a lawsuit. Few debtors understand that the threat of legal action by debt collectors can actually be spun against them, since any such threat is a violation of the FDCPA. A very broad range of legal threats are in breach, including those that are (1) not intended to be carried out when made, (2) not as imminent as presented, (3) beyond the purview of the debt collector’s authority (i.e., those the creditor didn’t authorize), or (4) beyond the debt collector’s legal authority (e.g., the state forbids lawsuits by collection agencies).⁹

Further, even oblique or disguised threats of a lawsuit on the part of debt collectors are classified as threats under the FDCPA. Examples include claiming that they will agree to settle debts “out of court,” saying they “can” sue you, stating that the debt will be referred to a lawyer for debt collection, claiming that they are authorized to proceed with legal action against you, sending a complaint (lawsuit) to a debtor before actually filing it with the court, claiming that “action will be taken” to secure payment in full, listing available creditor remedies (inclusive of legal action), saying “every step will be taken,” and marking an envelope with “legal matter enclosed” or the like.¹⁰

Dunning Letter Requirements

An initial letter from a debt collector must comply with the FDCPA rule requiring that a letter contain the following:¹¹

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—

(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer’s written request within the thirty day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(b) If the consumer notifies the debt collector in writing within the thirty day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

The rules concerning a debt collector’s communication are very strict, and even the validation rights notice (paragraph b above) must be placed in such a manner as to avoid confusion to the “least sophisticated consumer.” “The law was not made for the protection of experts but for the public—that vast multitude of which includes the ignorant, the unthinking, and the credulous.”¹² Not only must a validation notice be present, but it also cannot be obscured by other language, contradict the content of the validation rights, or serve to confuse a debtor. This includes making the font of the validation paragraph smaller than that of the rest of the notice, capitalizing nonvalidation content, or placing the validation notice on the back of the notice. Demanding payment within 10 days would also serve to confuse or contradict the validation rights by causing a debtor to perceive that he or she actually doesn’t have 30 days to dispute a debt under validation.¹³ Likewise, threatening lawsuit within 10 days is contradictory.¹⁴

And there’s more. The letter must also contain the name of the creditor, state that the debt is assumed to be valid if it is not disputed, and disclose the exact amount of the debt, not just a principal balance “plus late fees, attorney fees, and interest.”¹⁵

7. 15 U.S.C. § 1692a(6). Use of a false name would indicate that a third party collector is involved in the collection efforts, and, as such, the creditor would be subject to the FDCPA where he or she wouldn’t have been otherwise. Even an in-house attorney (for the creditor) using his or her own name on stationery when communicating with a debtor would make the creditor subject to the FDCPA. See Nielsen v. Dickerson, 307 F.3d 623 (7th Cir. 2002); Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232 (5th Cir. 1997). Also see NCLC Fair Debt Collection § 4.2.5 (5th ed. 2004 and 2005 Supp.).
8. See NCLC Fair Debt Collection § 5.3.5.3 (5th ed. 2004 and 2005 Supp.).
9. NCLC Fair Debt Collection § 5.3.5.3 (5th ed. 2004 and 2005 Supp.).
10. Numerous other types of deceptive statements are also violations of the FDCPA. For a complete list and hundreds of case citations, see NCLC Fair Debt Collection § 5.5.2.8 (5th ed. 2004 and 2005 Supp.).
11. 15 U.S.C. § 1692g(a).
12. Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir. 1985).
13. U.S.C. § 1692g and 1692e(10). Graziano v. Harrison, 950 F.2d 107, 111 (3rd Cir. 1991); Johnson v. Revenue Management Corp., 169 F.3d 1057 (7th Cir. 1999). The 4th Circuit found likewise.
14. 15 U.S.C. § 1692g and 1692e(10). Graziano v. Harrison, 950 F.2d 107, 111 (3rd Cir. 1991). See also Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997).
15. 15 U.S.C. § 1692g; Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, and Clark, L.L.C., 214 F.3d 872 (7th Cir. June 5, 2000); see also Zaborac v. Phillips and Cohen Assocs., Ltd., 330 F. Supp. 2d 962 (N.D. Ill 2004) (section 1692g(a)(1) requires statement of the amount the consumer allegedly owes, not just the unpaid principal balance). See NCLC Fair Debt Collection § 5.7 (5th ed. 2004 and 2005 Supp.).