Thought that the following would be of interest. Published on CBS MarketWatch:
"SLAM DOWN THE PHONE
2/20/2003 12:03:00 AM
By Andrea Coombes
12:03 AM ET Feb 20, 2003
SAN FRANCISCO (CBS.MW) -- Borrowers faced with debt payments they can't make eventually will hear from a collector -- and how they handle that call can affect their lives for years to come.
While most debt-collection agencies operate ethically, some collectors act like bounty hunters, harassing and intimidating consumers to retrieve funds.
Much of that intimidation comes in the form of telephone calls. "I'm hearing more complaints about telephone abuse than I have at any time in the past," said O. Randolph Bragg, an attorney with Chicago-based Horwitz & Associates, whose focus is representing consumers facing abusive debt collectors.
"By telephone abuse, I mean threats. 'We're going to have you arrested,
we're going to sue you,'" Bragg said. Those types of threats are illegal unless the collector actually intends to sue. Consumers are also harassed with "obscenities and name calling," he said.
But in most cases consumers' rights are protected under the Fair Debt
Collection Practices Act, including "the right to be free of abusive, harassing,
deceptive, misleading and unfair collection practices," said Margot Saunders, managing attorney with the National Consumer Law Center, a consumer advocacy group. "If any of those things are happening, they should record it or keep proof of it, and
they should complain about it."
One major exception to consumer protection is that the Act does not
cover creditors, but only third-party debt collecting agencies, so that consumers harassed by creditors are not protected.
"You have some creditors that do all their own collections that are just as nasty as some of the agencies, and there's no protection," said Rob Treinen, an associate attorney with New Mexico-based Feferman & Warren, who represents consumers on debt-collection issues.
The following are some of the consumer protections offered under the Act when dealing with third-party debt collectors:
- Refuse all further contact.
Consumers have a right to request that all contact cease, but they must do so in writing. Then, collectors can only contact consumers again to tell them they plan no further contact, or to notify them that they're going to take some action, such as a lawsuit. But be aware that just because the contact ceases doesn't mean the debt goes away. The collector or your original creditor could
still sue you.
- Request validation of the debt. Consumers have 30 days after initial
contact to request, in writing, that the collector verify the debt they owe. Any
consumer who disputes the amount of the debt, believes the debt has already been paid, or is a victim of identity theft and believes someone else owes the debt should take this action, Saunders said.
- Retain an attorney.
Once a consumer retains an attorney and notifies the collector of that fact, the collector can only contact the attorney. "Very often the most helpful thing that an attorney can do is essentially taking the burden of being
contacted off the consumer. It's very stressful," Saunders said.
- Pay only what you owe.
While some states allow debt collectors to add fees to the original debt amount, some collectors increase the debt amount by significant, and illegal, amounts. "Very often we see collectors padding the debts with attorney's fees and collection fees, and that padding has to be permitted either in the
(original credit contract) or in state law," Saunders said.
Defining harassment
_______________________________________________________________________
The law also defines harassment. For instance, third-party debt collectors are not allowed to "repeatedly use the telephone to annoy someone," according to the Federal Trade Commission, which enforces the law. They're also not allowed to call before 8 a.m. or after 9 p.m., unless the consumer allows it.
Also, it's illegal for a collector to threaten to arrest you, but debt
collectors can sue you. That means they can legally inform you they intend to sue, but only if they actually intend to do so.
Of course, it can be tricky determining what a collector intends to do. "If the
consumer receives the threat of a lawsuit, it can be difficult to know
if that's true or not," said Joel Winston, the FTC's associate director for financial
practices. The only way to find out the collector's intention is to test them on it by requesting that all contact cease. You'll either be served with a lawsuit, or you won't hear from the collector again, if that collector abides by the law.
As for other threats, in some states it is legal for a collector to have your wages garnished in order to collect debt, but this can happen only after a
court judgment. That is, a collection agency cannot do this without going to court, though some collectors abuse the law by claiming they have the power to garnish wages, experts
said.
Collectors are only allowed to contact your relatives or friends if they can't find you, and they're not allowed to discuss your debt situation with others.
And if a consumer tells the collector that he or she isn't allowed to be contacted at work, the collector must refrain from doing so.
Who to call
_______________________________________________________________________
Consumers who feel they're being harassed illegally should complain to
the Federal Trade Commission (877-FTC-HELP), as well as their state attorney generals' office, experts said. For more information on debt-collection practices and the law, go to www.ftc.gov.
Debtors being harassed might also want to consider retaining an attorney
who specializes in debt collection issues. The law levies $1,000 in penalties against a collector if a consumer wins a lawsuit, as well as actual damages, which can include
emotional trauma, and attorneys' fees.
To find an attorney who specializes in consumer advocacy, Saunders recommends the National Association of Consumer Advocates, at www.naca.net.
--------------------------------
The original article can be found at:
http://aolpf5.marketwatch.com/news/story.asp?guid={D2F9CC98-8292-444A-B865-5F76B67E4325}&siteid=mktw
"SLAM DOWN THE PHONE
2/20/2003 12:03:00 AM
By Andrea Coombes
12:03 AM ET Feb 20, 2003
SAN FRANCISCO (CBS.MW) -- Borrowers faced with debt payments they can't make eventually will hear from a collector -- and how they handle that call can affect their lives for years to come.
While most debt-collection agencies operate ethically, some collectors act like bounty hunters, harassing and intimidating consumers to retrieve funds.
Much of that intimidation comes in the form of telephone calls. "I'm hearing more complaints about telephone abuse than I have at any time in the past," said O. Randolph Bragg, an attorney with Chicago-based Horwitz & Associates, whose focus is representing consumers facing abusive debt collectors.
"By telephone abuse, I mean threats. 'We're going to have you arrested,
we're going to sue you,'" Bragg said. Those types of threats are illegal unless the collector actually intends to sue. Consumers are also harassed with "obscenities and name calling," he said.
But in most cases consumers' rights are protected under the Fair Debt
Collection Practices Act, including "the right to be free of abusive, harassing,
deceptive, misleading and unfair collection practices," said Margot Saunders, managing attorney with the National Consumer Law Center, a consumer advocacy group. "If any of those things are happening, they should record it or keep proof of it, and
they should complain about it."
One major exception to consumer protection is that the Act does not
cover creditors, but only third-party debt collecting agencies, so that consumers harassed by creditors are not protected.
"You have some creditors that do all their own collections that are just as nasty as some of the agencies, and there's no protection," said Rob Treinen, an associate attorney with New Mexico-based Feferman & Warren, who represents consumers on debt-collection issues.
The following are some of the consumer protections offered under the Act when dealing with third-party debt collectors:
- Refuse all further contact.
Consumers have a right to request that all contact cease, but they must do so in writing. Then, collectors can only contact consumers again to tell them they plan no further contact, or to notify them that they're going to take some action, such as a lawsuit. But be aware that just because the contact ceases doesn't mean the debt goes away. The collector or your original creditor could
still sue you.
- Request validation of the debt. Consumers have 30 days after initial
contact to request, in writing, that the collector verify the debt they owe. Any
consumer who disputes the amount of the debt, believes the debt has already been paid, or is a victim of identity theft and believes someone else owes the debt should take this action, Saunders said.
- Retain an attorney.
Once a consumer retains an attorney and notifies the collector of that fact, the collector can only contact the attorney. "Very often the most helpful thing that an attorney can do is essentially taking the burden of being
contacted off the consumer. It's very stressful," Saunders said.
- Pay only what you owe.
While some states allow debt collectors to add fees to the original debt amount, some collectors increase the debt amount by significant, and illegal, amounts. "Very often we see collectors padding the debts with attorney's fees and collection fees, and that padding has to be permitted either in the
(original credit contract) or in state law," Saunders said.
Defining harassment
_______________________________________________________________________
The law also defines harassment. For instance, third-party debt collectors are not allowed to "repeatedly use the telephone to annoy someone," according to the Federal Trade Commission, which enforces the law. They're also not allowed to call before 8 a.m. or after 9 p.m., unless the consumer allows it.
Also, it's illegal for a collector to threaten to arrest you, but debt
collectors can sue you. That means they can legally inform you they intend to sue, but only if they actually intend to do so.
Of course, it can be tricky determining what a collector intends to do. "If the
consumer receives the threat of a lawsuit, it can be difficult to know
if that's true or not," said Joel Winston, the FTC's associate director for financial
practices. The only way to find out the collector's intention is to test them on it by requesting that all contact cease. You'll either be served with a lawsuit, or you won't hear from the collector again, if that collector abides by the law.
As for other threats, in some states it is legal for a collector to have your wages garnished in order to collect debt, but this can happen only after a
court judgment. That is, a collection agency cannot do this without going to court, though some collectors abuse the law by claiming they have the power to garnish wages, experts
said.
Collectors are only allowed to contact your relatives or friends if they can't find you, and they're not allowed to discuss your debt situation with others.
And if a consumer tells the collector that he or she isn't allowed to be contacted at work, the collector must refrain from doing so.
Who to call
_______________________________________________________________________
Consumers who feel they're being harassed illegally should complain to
the Federal Trade Commission (877-FTC-HELP), as well as their state attorney generals' office, experts said. For more information on debt-collection practices and the law, go to www.ftc.gov.
Debtors being harassed might also want to consider retaining an attorney
who specializes in debt collection issues. The law levies $1,000 in penalties against a collector if a consumer wins a lawsuit, as well as actual damages, which can include
emotional trauma, and attorneys' fees.
To find an attorney who specializes in consumer advocacy, Saunders recommends the National Association of Consumer Advocates, at www.naca.net.
--------------------------------
The original article can be found at:
http://aolpf5.marketwatch.com/news/story.asp?guid={D2F9CC98-8292-444A-B865-5F76B67E4325}&siteid=mktw
