Debt collectors cannot lie to you

The Fair Debt Collection Practices Act forbids a debt collector from making any false or misleading statements when they are attempting to collect a debt. If a debt collector lied to you, here's what you need to know about your rights under the FDCPA.

The FDCPA applies to “debt collectors” collecting “consumer debts”

The FDCPA only covers a debt collector that is collecting a debt for someone else. It does not apply to a creditor collecting its own debts. So if the false statement was made by a bank or credit card company that is collecting its own debts, the FDCPA doesn’t apply. But the FDCPA does apply to collection agencies, debt buyers, and law firms who are collecting debts for someone else.

In addition, the FDCPA only applies when the debt being collected is a consumer debt. This is a debt used for personal, family, or household purposes. If the debt was incurred for a business, the FDCPA doesn’t apply.

Common debt collection lies

Although the FDCPA is clear that virtually any false statement is a violation, there are some collection lies and misleading statements that seem to happen frequently. These include:

• Telling you that you owe a debt that you already paid or that was discharged in bankruptcy

• Threatening to sue or garnish you after the statute of limitations has expired;

• Incorrectly reporting information on your credit report;

• Mis-stating your rights in student loan collections;

• Claiming that you personally owe a debt you have no obligation to pay, such as a debt for an ex-spouse or a deceased relative;

• Incorrectly stating the balance of your account (possibly because of unauthorized fees or uncredited payments);

• Suggesting that they are affiliated with an attorney when they are not;

The false statement probably has to be "material"

Although the FDCPA doesn't say anything about it, many courts have adopted a rule that the false statement has to be "material." This generally means that it's not enough to show merely that the debt collector lied to you. You must also show that they lie impacted your ability to evaluate your options in some way. In my opinion, any statement about the balance of the account, the legal status of the account, your legal rights, or the collector's legal remedies should be considered material.

If a debt collector lied to you, hold them accountable under the FDCPA

The FDCPA gives consumers the power to sue a debt collector that violates the law. It’s a great way to stop collection harassment cold and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:

• Up to $1,000 in statutory damages (even if you’ve suffered no monetary loss);

• Provable actual damages (including for emotional distress);

• Your attorney fees and court costs must be paid by the collector

Most consumer lawyers, including me, handle FDCPA lawsuits on a contingency fee. This means that you don’t pay us any fees unless I recover money for you and those fees come from the collector’s pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

Common FDCPA violations in student loan collections

The total amount of federal student loan debt in the U.S. is about one trillion dollars. When a borrower falls behind on payments, the student loan collections process begins. Although federal student loan collectors have impressive collection powers, it's important for consumers to recognize that the Fair Debt Collection Practices Act still prevents a debt collector from making false or misleading statements or otherwise harassing or abusing a consumer. Here are some of the most frequent FDCPA violations in student loan collections:

Misleading threats to garnish wages

Debt collectors often mislead or lie to consumers about the imminence of a wage garnishment if the consumer doesn't pay immediately. A federal student loan collector may institute an administrative wage garnishment against a consumer who is delinquent. No judgment is required. But there are important steps that a collector must follow before starting an administrative wage garnishment. They must send the consumer a notice--at least 30 days before starting the garnishment--that advises the consumer of their right to inspect the records related to the debt, their right to a written repayment agreement, and their right to a hearing. The consumer then has 15 days to request a hearing. And a private student loan collector doesn't have the ability to do an administrative wage garnishment. They have to sue the consumer and get a court judgment first. So, a collector can't just start a wage garnishment immediately if the consumer doesn't pay and any threats to the contrary probably violate the FDCPA.

Lies about how to get a federal student loan out of default

Debt collectors often lie to or mislead consumers about the ability to get a loan out of student loan collections. A federal student loan is considered to be in "default" if the borrower goes 270 days without making a payment. Once the loan is in default, a 25% collection fee may be tacked on. But a borrower can get a federal student loan out of default by "rehabilitating" the loan. This means making nine voluntary, reasonable, and affordable monthly payments within 20 days of the due date during ten consecutive months. A borrower may also be able to get the loans out of default by consolidating into a single loan. Debt collectors often tell consumers that there's nothing they can do to get the loan out of default, or don't tell them about all of their options, which may violate the FDCPA.

Telling consumers that they can't discharge student loans in bankruptcy

Student loan collectors often tell consumers that student loans can't be discharged in bankruptcy. While this is often true, it isn't always true. A borrower may be able to get a student loan discharged if they can prove undue hardship. The burden of proving undue hardship is very difficult, but it can, and has, been done. A debt collector that tells you that student loans can never be eliminated in bankruptcy isn't telling the truth and is likely violating the FDCPA.

Illegal contacts with third parties

Under the FDCPA, a student loan collector (or any collector) can't communicate with your family members, co-workers, friends, or other third parties. Even threats to do so probably violate the FDCPA.

The bottom line

If a student loan collector chooses to give a consumer legal advice, they better get it right. Making false statements about the law or a consumer's options probably violates the FDCPA.

How to stop collection calls from a harassing debt collector

The Fair Debt Collection Practices Act gives you the right to stop collection calls. All you have to do is send the debt collector a letter telling them to cease all communications. There is no magic language required--just say in plain-English that you don't want them to contact you anymore. Keep a copy of the letter for your records and mail it certified with a return receipt so you can prove that the collector received it. Once the collector receives your letter, they must stop contacting you immediately. There are a few caveats here, though:

• If you want to resolve the debt, you may not want to stop all calls. If your goal is to work something out with the debt collector, you probably want to keep the lines of communication open. But if you can't afford to pay or if the debt collector harasses you, it may make sense to cease all future calls.

• The cease request will not stop any legal action. The FDCPA only requires that the debt collector cease communications with you. Courts have found that a person's cease request does not require a collector to stop or forego any collection lawsuits or garnishments.

• The cease request only applies to the collector you send it to. Many debt collectors will respond to a cease letter by transferring the account to a different debt collector. In most cases, your cease request to the first debt collector won't apply to a subsequent debt collector. You will likely have to send that subsequent collector another cease letter.

• Debt collection scammers may not honor your letter. Unfortunately, there are a few debt collection scammers out there. These fraudsters are just trying to get your money--there may not even be valid debt. Compliance with the FDCPA is not a high priority for a scammer, so they probably won't honor your cease request. The best thing to do with these scammers is to make it clear to them that you refuse to pay.

• If a debt collector receives your cease letter and continues to contact you, they've probably violated the FDCPA. One of the most important rights the FDCPA gives a person is the right to stop collection calls. If a collector violates this right, they should be held accountable for their illegal conduct. Consider talking to a lawyer in your area who sues debt collectors under the FDCPA.

You can sue under the FDCPA even if you owe the debt

I'm often asked whether a consumer can sue a debt collector under the Fair Debt Collection Practices Act (FDCPA) if they owe the underlying debt. The answer is a resounding YES! The main purpose of the FDCPA is to protect all consumers against debt collection abuses, whether they owe the underlying debt or not. In fact, most people who sue debt collectors under the FDCPA owe the debt.

The FDCPA prohibits abusive, deceptive, and unfair debt collection practices. Some of the more common debt collection practices prohibited by the FDCPA are:

• informing third parties that you owe a debt;

• contacting you at inconvenient times or contacting you at work after you've told the debt collector not to;

• threatening you with violence;

• using abusive or profane language;

• threatening to take legal action when the debt collector has no intent to do so;

• falsely implying that you committed a crime by not paying the debt.

If a debt collector violates the FDCPA, you have the right to sue the debt collector and recover damages. You are entitled to $1,000 in statutory damages and compensation for actual damages, such as emotional distress. And if your case is successful, the debt collector must pay your attorney fees. Because of this, most consumer lawyers will accept a FDCPA case on a contingency fee arrangement. This usually means you will not have to pay any attorney fees, unless your case is successful.

Collectors are liable for emotional distress caused by illegal collection tactics

The Fair Debt Collection Practices Act prohibits debt collectors from using false, misleading, abusive, and harassing tactics to collect debts. Under the FDCPA, any person who has been subjected to illegal debt collection practices may sue the debt collector to hold it accountable and enforce the law. If successful, the plaintiff is entitled to $1,000 in statutory damages and the collector must pay her reasonable attorney fees and costs. More importantly, the collector may also be responsible for compensating the person for any emotional distress that she has suffered from the illegal collection tactics. Commons symptoms of emotional distress caused by illegal collection practices include:

• Crying

• Loss of sleep

• Loss of appetite

• Headaches, vomiting, or stomach pain

• Martial problems

• Problems concentrating at work

While many debt collectors profess cold-hearted skepticism that a person could be so upset by collection efforts, I've worked with many clients who suffered from emotional distress symptoms. I had one client who spent many sleepless nights crying in her bedroom because a collector was pursuing her for a debt she already paid. Another client suffered from severe anxiety, nausea, and headaches because a collector pursued her for a debt she didn't owe. So I know for a fact that  illegal debt collection practices cause emotional distress.

The law says that a collector has to pay for the emotional damage their harassing or abusive collection tactics caused. While medical evidence is usually helpful in proving the extent and cause of the emotional distress, most courts don't require it. In most cases, it is sufficient for the person to testify in detail about their emotional distress symptoms. Often, a witness, such as a spouse, co-worker, or friend has seen the symptoms and can corroborate the plaintiff's testimony.

Depending on the severity and duration of the emotional distress, the amount of damages awarded can be significant.

For example, in Fausto v. Credigy, the collector made repeated calls and false threats of credit reporting over a Wells Fargo account. The Faustos believed that they had already paid off the account and told the collectors to stop calling. The collector continued to call--over 90 times in total. At trial the Faustos testified that they had many sleepless nights, an inability to eat, and the stress caused problems within their family. Ultimately, a Northern California jury awarded the Faustos $100,000 for emotional distress caused by the collector's harassment.

In another case, McCollough v. Johnson, Rodenburg & Lauinger, a collection law firm filed a lawsuit that was barred by the statute of limitations. The law firm, JRL, had information from its client that the suit was time-barred, but continued to prosecute it for 8 months. At trial, McCollough testified that JRL's wrongful lawsuit caused him anxiety, pain, increased temper, and conflict with his wife. Although McCollough already suffered from a disabling pre-existing condition due a traumatic brain injury, he characterized JRL's suit as the straw that broke the camel's back. A Montana jury awarded McCollough $250,000 for the emotional distress caused by JRL.

In another case, Yazzie v. Law Offices of Farrell & Seldin, a collection law firm tried to garnish the wages of Lucinda Yazzie, despite repeated notice that the debt was actually owed by someone else with the same name but with a different social security number. The law firm had changed the social security number in its files from the SSN of the correct account holder, to Ms. Yazzie's. Farrell & Seldin's collection attempts continued for three years. The New Mexico jury awarded Ms. Yazzie $161,000 for her emotional distress suffered during the three years of being wrongfully pursued for a debt that wasn't hers.

Similarly, in Mejia v. Portfolio Recovery Associates, a debt buyer sued the wrong person for a $1,000 credit card account. Ms. Mejia repeatedly told them it wasn't her debt, but the debt buyer persisted with the lawsuit. Ms. Mejia testified that the lawsuit terrified her and that she feared she would lose her house or be arrested. A Missouri jury awarded Ms. Mejia $250,000 for emotional distress.

Of course, these cases all involved particularly egregious collection conduct and severe emotional distress. Obviously, not every case results in these kind of damages.

But if you've endured illegal collection practices that caused you stress, anxiety, fear, or other symptoms of emotional distress, the law may require the collector to be accountable for your suffering.

How to stop collection calls to your cell phone

Few things are more annoying than repeated debt collection calls to your cell phone. Often, these calls are made by an automatic dialer. It's not unheard of for people to get 10 or more of these robocalls per day. This is incredibly frustrating if you rely on your cell phone for work or to keep tabs on your children. The good news is that there are a couple ways to stop these annoying robocalls.

Verbally tell the collector to stop the robocalls

You should first figure out if the collection calls to your cell phone are being made by an autodialer. You can usually spot a robocall if there is a pause or click before a person comes on the line. An automated message is also a clear sign of an autodialed call. If the collection calls are robocalls, there is a powerful federal law called the Telephone Consumer Protection Act that protects you. The TCPA forbids anyone from using an autodialer to call your cell phone without your consent. In most debt collection situations, consent is given in the fine print of the terms and conditions of the credit agreement. Most credit agreements have language buried in them that gives the creditor your consent to robocall your cell phone. This consent is then passed on to the debt collector if you fall behind on your payments.

Fortunately, the TCPA gives you the right to revoke your consent to autodialed calls at any time and in any reasonable way. This includes revoking your consent verbally over the phone. All you have to do is tell the collection representative that you are revoking your consent to robocall your cell phone. Under the TCPA, they have to stop the autodialed calls immediately.

Write a letter demanding that the collection calls to your cell phone stop

Even though you can make the autodialed calls stop by verbally revoking your consent, there are two drawbacks to that approach. First, it can be difficult to prove a verbal statement. Second, the TCPA only allows you to revoke your consent to autodialed calls. The collector is free to continue calling your cell phone as long as they manually dial the calls.

Thankfully, there is another federal law that regulates debt collection calls: the Fair Debt Collection Practices Act. Under the FDCPA, you have the right to stop all calls from a debt collector by writing the collector and requesting that they stop calling you. This letter doesn't have to be fancy. Just make sure to include your full name and your account number if you have it so that the collector can properly identify your file. All the letter has to say is that you want the collection calls to stop. You should list the all of the phone numbers that you no longer wish to receive calls on. If you want to continue to get collection calls on a certain phone number, you should say so. If you want to only get calls at a certain time, you should say that too. Under the FDCPA, the debt collector has to comply with these requests or face possible legal action.

In some cases, you can sue the collector to make the robocalls stop

Although not all collection calls to your cell phone are against the law, some of them are. And the penalties for illegal autodialed calls are significant. Under the TCPA, the collector must pay you between $500 and $1,500 per call for each offending robocall. The court will also issue an injunction against the collector forbidding further autodialer calls. Here's how you know if debt collection robocalls are illegal:

• The collection calls were made with an autodialer. Under the TCPA, an autodialer is anything that "has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers." The Federal Communications Commission has made it clear that this definition is very broad and covers most, if not all, of the popular dialing software used by debt collectors.

• As technology advances, though, this issue is becoming more complex. Some courts have said that even if an autodialer is involved, if it requires some human intervention to make the call, then the calls aren't barred by the TCPA. It's no surprise, therefore, that debt collection industry vendors are currently designing software that requires some human intervention in an effort to evade the TCPA. The FCC, however, has signaled that it doesn't approve of these efforts to exploit the spirit of the law, so future rule making may be coming.

• The robocalls were made to your cell phone. The TCPA only prohibits robocalls to wireless phones. Most autodialed debt collection calls to a landline are permitted.

• You've revoked your consent OR you never consented in the first place. Robocalls to your cell phone are only illegal if you didn't consent to them. As noted above, in the context of debt collection consent is typically given in the credit agreement. That consent, however, can be revoked verbally or in writing. Once you've revoked your consent, all future robocalls to your cell phone violate the TCPA and you're entitled to $500 to $1,500 for each illegal call.

It's also possible that you've never given consent for the collection calls to your cell phone. This most often happens when the collector is trying to reach the previous owner of your cell phone number. Because you never consented to any of these wrong-number calls, you can enforce your rights under the TCPA without first revoking your consent.

Can a debt collector call you at work?

Jen is an administrative assistant at a small dental clinic. She recently got divorced and is struggling to keep up with her bills on just one income. She's missed a few credit card payments and got a couple collection notices in the mail.

One day, while she was sitting at her desk, a debt collector called. The collector made Jen confirm her social security number and date of birth and then asked how she planned to take care of her unpaid credit card bill. Worried that her co-workers would overhear the conversation, Jen quickly told the collector that she was at work and couldn't take personal calls.

A few days later, the same debt collector called Jen again on her work phone. This time, he threatened to garnish Jen's wages if she didn't set up payment arrangements immediately. Jen again told the collector that she was at work and couldn't talk, and said she would call him back when she was at home.

Was the debt collector's first call illegal? What about the second?

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The Fair Debt Collection Practices Act doesn't expressly forbid a debt collector from calling the workplace. But once a collector knows that someone can't take calls on the job, further calls are prohibited.

So in Jen’s case, the first call wasn’t illegal because, until that point, the collector didn’t know that Jen couldn’t talk at work. But once Jen told the collector that she couldn’t take personal calls, the collector knew not to call anymore. Therefore, the second collection call violated the Fair Debt Collection Practices Act.

Collection calls to someone else at your work are almost always illegal

What if instead of calling Jen’s direct line, the collector had called the receptionist and asked to speak to Jen about an unpaid bill?

Illegal. Big-time. Virtually every collection call to a co-worker is illegal, especially if the collector mentions the debt. There is an exception, though, if the collector calls to enforce a court judgment. For example, a collector may call your human resources department to discuss the logistics of a pending wage garnishment against you.

How to use the FDCPA to stop illegal collection calls to your workplace

The FDCPA gives you the power to sue a debt collector that violates the law. It's a great way to stop illegal collection calls to your work and to hold the debt collector accountable for its illegal conduct. Under the FDCPA, a successful claim gets you:

• Up to $1,000 in statutory damages (even if you've suffered no monetary loss);

• Provable actual damages (including for emotional distress);

• Your attorney fees and court costs must be paid by the collector

Most consumer lawyers handle FDCPA lawsuits on a contingency fee. This means that you don't pay any fees unless your attorney recovers money for you and those fees come from the collector's pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

Did a debt collector illegally call you at work? Get a free consult now.

Can a debt collector call your friends and family?

Andre is a 30-year old who works in sales for a medical device company. Although he makes a decent living now, he struggled financially in his 20s and has a few debts in collections due to his over-reliance on credit cards after college.

Andre has been dating Stephanie for nearly a year now and they’ve recently talked about moving in together. Andre hasn’t figured out yet how to tell Stephanie about his credit card debt.

One night, Stephanie mentions that she’s been getting a bunch of calls from an unknown number for the last few weeks. Stephanie never answered any of the calls and the caller never left a voicemail. Until today. Curious who’s been calling her over and over, Stephanie finally answered the phone. Turns out, it was a debt collector who told Stephanie he was trying to get in touch with Andre about an unpaid credit card bill.

When Stephanie told Andre this, he was humiliated. Although she says that she understands, Andre thinks that she’s having second thoughts about moving in with him.

Were the collector’s repeated calls to Stephanie illegal?

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The Fair Debt Collection Practices Act forbids a debt collector from communicating with your friends and family. In fact, collection communications to most third-parties are illegal.

The key to understanding the extent to this rule, though, is the word “communicate.” The law defines “communicate” as the conveying of information about a debt. So, for example, a missed call with no voicemail probably is not a “communication” because no information about a debt was conveyed. Therefore, the collection calls that Stephanie didn't answer weren't illegal because the collector didn't "communicate" anything about a debt. But the call that Stephanie picked up where the collector told her about Andre's debt was an illegal communication with a third party.

Communications with certain third parties are allowed

There are a few exceptions to the general rule, though. A collector is allowed to communicate with a couple of people without breaking the law, including:

• your spouse

• your attorney

• the debt collector's attorney

• the creditor (ie. the debt collector's client)

• the creditor's attorney

• a credit reporting agency (ie. Equifax, Experian, TransUnion, etc);

A collector may also communicate with your employer if it's necessary to enforce a court judgment. For example, a debt collector who has a judgment against someone and wants to garnish his wages can call that person’s employer to confirm that he works there.

A collector may also communicate with a third-party to learn your contact information

Another exception to the general rule against third-party communications is the "location information" exception. The law allows debt collectors to call friends or family to learn your address and phone number. But this call is strictly regulated:

• the collector must identify himself and tell your friend that he is confirming your location information;

• the collector can't identify his employer unless your friend asks;

• the collector can't tell your friend that you owe a debt or discuss the details of the debt;

• in most cases, the collector can't ask your friend to have you call the collector back;

• in most cases, the collector only gets to make this "location information" call one time

Understand, however, that if the collector already knows your address and phone number, then it has no need to call a third party to get your location information.

HOW TO USE THE FDCPA TO STOP ILLEGAL COLLECTION CALLS TO third parties

The FDCPA allows you to sue a debt collector who violates the law. It's a great way to stop illegal collection calls to you friends and family and to hold the debt collector accountable for its conduct. Under the FDCPA, a successful claim gets you:

• Up to $1,000 in statutory damages (even if you've suffered no monetary loss);

• Provable actual damages (including for emotional distress);

• Your attorney fees and court costs must be paid by the collector

Most consumer lawyers handle FDCPA lawsuits on a contingency fee. This means that you don't pay any fees unless your attorney recovers money for you and those fees come from the collector's pocket, not yours. Congress wrote the FDCPA this way to incentivize people to enforce the FDCPA and help the government regulate debt collectors and ensure compliance with the law.

Did a debt collector illegally call someone that you know? Get a free consult now.

Stop collection calls for someone else's debt

On of the most frequent consumer complaints received by the Consumer Financial Protection Bureau are annoying collection calls for someone else. It's unclear whether these collectors are intentionally pursuing the wrong person or that they've made a mistake. But if you're getting calls or letters from a collector for someone else's debt, you probably don't care why it's happening, you just want the collection attempts to stop. Here are some suggestions to stop collection calls for someone else.

Collection calls for someone else

If a debt collector is calling or writing you about a debt that you don't owe, the first thing you should do is tell them very clearly that they have the wrong person and that this is someone else's debt. Be polite but firm. The collector may ask you to confirm the last four digits of your social security number or a similar personal identifier. While it may be unwise to give the collector your full social security number, there probably isn't too much risk in giving them  the last four digits to confirm that the debt isn't yours. The collector may ask you if you know the actual account-holder and how to reach them. While you're under no obligation to do so, you may consider passing along the other person's information if you know it.

In addition to verbally telling the collector that it is someone else's debt, you may consider sending a follow-up letter confirming what you told them. Identify yourself in the letter and then write something like: "you called me on this date at this number. I am not the person who owes this debt. Please stop contacting me." If you know any details about the account in question, include a reference to those in your letter to be sure the collector can properly identify the account. Send this letter certified mail with a return receipt and keep a copy of the letter and receipt for your records.

You should also keep detailed records of any additional collection attempts after you've notified the collector that the debt isn't yours. Keep track of the time, dates, and duration of any additional calls and save any voice messages. If you think the calls are robocalls, make a note of that and why you think so. Also, keep copies of any letters or other documents that they send you.

It's also a good idea to check your credit reports to make sure the other person's debt isn't listed on your reports. Use Annual Credit Report to get free copies of your credit reports from the three major credit reporting agencies. Once you have the reports, make sure that the other person's account isn't showing up on your credit report. If it is, you should send a dispute letter to each of the credit bureaus incorrectly reporting that account. Take a look at this post for more information about how to dispute incorrect information on your credit report.

If you've told the debt collector that you are not the right person and continue to get collection calls for someone else, it's time to talk to a consumer rights attorney to discuss the situation in more detail. In addition to helping you stop the collection attempts, a consumer attorney can advise you whether you have any claims under the Fair Debt Collection Practices Act against the debt collector. If the debt doesn't belong to you, you've told the collector that, and the collector still keeps calling, it deserves to get sued under the FDCPA and be held accountable for harassing an innocent consumer.

Collection lawsuit for a debt that isn't yours

If you get served with a collection lawsuit for someone else's debt, you need to take additional steps. You should do everything suggested above, but you also have to submit an answer to the lawsuit. In Minnesota, the answer must be submitted within 20 days. An answer is a formal legal document that responds to each of the allegations in the complaint. If the debt isn't yours, you should be able to deny most of the allegations in the lawsuit. You should also note somewhere in your answer that the debt is someone else's. Even if you don't owe the debt, you have to answer the lawsuit. Failure to respond to the lawsuit will likely result in a default judgment against you. A default judgment can be difficult (and expensive) to overturn, even if the debt isn't yours. It may also lead to garnishments and other unpleasantness.

Because the consequences of a collection lawsuit are quite serious, you should strongly consider discussing your situation with a consumer lawyer. A consumer lawyer can help you prepare an answer to the lawsuit and also advise you if you have possible counterclaims against the debt collector for pursuing the wrong person.

Use the TCPA to stop wrong number robocalls

Unwanted robocalls and texts are one of the most frequent consumer complaints received by the Federal Communications Commission. In 2014 alone, the FCC received about 215,000 complaints about autodialer calls and texts. These calls are particularly annoying when the caller is trying to reach someone else. Often, these wrong number robocalls are from debt collectors trying to collect a debt from the previous user of a phone number or from telemarketers pushing their products. In response to the overwhelming number of consumer complaints, the FCC recently strengthened consumer protections against wrong number robocalls by clarifying the Telephone Consumer Protection Act. The TCPA is a federal law that prohibits auto-dialed calls to your cellular phone without your consent. Until recently, however, there was a loophole of sorts for wrong number robocalls. Callers could argue that they had the consent of the person they were trying to reach and that was good enough to satisfy the TCPA's consent requirement.

Thankfully, the FCC closed this loophole. The FCC has made clear that callers are liable for robocalls to reassigned numbers when the current subscriber of the number has not consented, even if the caller has no notice of the reassignment. This reaffirms the TCPA's basic premise of giving consumers control over the calls that they receive.

Under the TCPA, you can obtain an order from a court that requires the caller to stop placing wrong number robocalls to your cell phone. In addition, the TCPA provides for damages of at least $500 per illegal robocall. This $500/call penalty is designed to deter illegal robocalls and to incentivize consumers to help the FCC enforce the TCPA through private lawsuits.

Things a debt collector won't tell you

Reader's Digest posted an article last week titled 13 Things a Debt Collector Won't Tell You. It's a fascinating peek inside the world of debt collection and it gives some insight into how debt collectors are trained. Here are some of the most revealing, along with my comments:

• Debt collectors are trained that all consumers are compulsive liars. Let's face it, collecting debt is an unpleasant job, especially if you have a conscience. It's much easier to aggressively push for payment when your training demonizes all consumers as irresponsible liars.

• Debt collectors don't care about why you can't pay because they've heard every hard-luck story there is. There's nothing to be gained from explaining to the collector why you fell behind on paying your bills. Collectors with a conscience don't last long, so chances are that the collector you're dealing with doesn't have one.

• Collectors are trained to get as much personal information as possible. Never tell a collector where you work or where you bank. If you're unable to settle the account, the collector will use this information to garnish your bank account and wages.

• The more money the collector brings in, the bigger his bonus. Most collectors are paid a very small salary, plus a commission on the money that they collect. Collectors know that their ability to make ends meet is largely contingent upon how much money they can squeeze out of you. And collectors that consistently fail to meet their monthly collection goals routinely get fired. It's no surprise, then, that this immense pressure causes collectors resort to ruthless and illegal collection tactics.

Five reasons to sue a debt collector who violates the FDCPA

• Up to $1,000 in statutory damages. If you successfully sue a debt collector, the court will award you up to $1,000 in statutory damages. These damages are provided by law as a penalty against a debt collector that violated the FDCPA and you don't have to prove that you suffered any actual harm to be awarded statutory damages. Although there are rare cases where a court awards a consumer less than $1,000, in most cases the consumer is awarded the full $1,000.

• Provable actual damages. If a debt collector's abuse has caused you to cry or lose sleep or if the collector's harassment has affected your relationship with your loved ones or your performance at work, you may be able to recover actual damages. Not every consumer will suffer actual damages due to a collector's conduct, but if you can successfully prove that you've suffered tangible harm, you're entitled to compensation for that suffering.

• A free attorney. Probably the most important remedy under the FDCPA is the fee-shifting provision. This means that if you win your case, the collector has to pay your attorney fees. Because of this, most consumer attorneys will sue a debt collector on a full contingency fee, which means that you don't have to give your lawyer any money up front. Your attorney gets paid by the debt collector or gets a percentage of any out-of-court settlement.

• Your litigation costs are covered. Litigation can be expensive. The costs for filing fees, service fees, deposition transcripts, etc. can quickly add up. But if you win your FDCPA case, the debt collector has to pay all of your court costs.

• Hold the debt collector accountable. When the FDCPA was enacted, Congress gave each individual consumer the right to sue a debt collector for violating the Act. The idea was that consumers and their attorneys would act as "private attorney generals" by holding debt collectors that violate the FDCPA accountable for their conduct through private lawsuits. Debt collectors love to lecture consumers about taking "personal responsibility" for paying their bills. An FDCPA lawsuit is a chance to turn this argument right back around at the debt collector and force them to take responsibility for their illegal debt collection tactics.

A simple test for figuring out whether a debt collector violated the FDCPA

The easiest way, perhaps, to figure out whether a debt collector has run afoul of the FDCPA is to think about the Act broadly. Without getting into specifics, the FDPCA prohibits debt collectors from doing anything that is (1) unfair; (2) untrue; or (3) harassing or abusive. Obviously, the Act lists a number of specific debt collection tactics that fall into these three categories. But the FDCPA also makes it very clear that any debt collection conduct--whether specifically listed in the Act or not--that is unfair, untrue, or harassing and abusive is a FDCPA violation.

So rather than poring over the text of the FDCPA or reading dozens of articles on the internet, just ask yourself this question: did the collector do something that was unfair; untrue; or harassing or abusive? If your answer to this simple question is yes, there's a good chance that the debt collector violated the FDCPA and your next move should be to contact a consumer rights lawyer.

Dealing with payday loan collectors

Many of us, if we're lucky, have been living paycheck to paycheck. Sometimes the paychecks don't come soon enough and we're forced to swim with the sharks of the payday loan industry. These loans are terrible for myriad reasons. For instance, the interest rates on these loans can be as high as 900%. No, that is not a typo. NINE HUNDRED PERCENT!!! This extreme interest can make it nearly impossible for struggling people to ever break free from the clutches of a payday lender. The main issue I wanted to touch on today is what can happen in the months and years after you've paid off a payday lender. We're getting a lot of calls lately from people who've received harassing phone calls. The callers claim that the individual owes a debt to a payday lender, though they rarely identify who the lender is. They then proceed to threaten that criminal charges are pending and the only way to avoid jail is to pay up immediately. Or they say they will send someone to the debtor's residence to seize money or goods. Definitely a menacing prospect.

We think most of these calls are flat-out scams. The payday lenders have either sold their customer information to shady third parties or their data has been hacked. The callers often have a lot of information about the individuals, including their addresses and social security numbers. They often use this information to convince people of their legitimacy. They also prey on the fact that people who've used payday lenders in the past know from experience that these debts are difficult to pay off in full and that even a $1 balance can skyrocket quickly.

Whatever you do, don't agree to pay these collectors over the telephone. Do not give them any personal information about yourself or any of your financial accounts. Demand that they tell you the name of the payday lender you allegedly borrowed this debt from and that they put their demand in writing and mail it to you. Also, take notes on the call. Write down the number they've called from and the name the caller gave you (99 times out of 100, this will not be his/her real name). Note whether or not they spoke the phrase, "This call is from a debt collector and is an attempt to collect a debt," and make sure to write down any specific threats the caller made.

As soon as you are off the phone, we recommend contacting a consumer attorney or the state Attorney General's office. If the call is a scam, either should be able to tell you that and advise you on next steps.

Can a debt collector leave messages on my voicemail?

The Fair Debt Collection Practices Act (FDCPA) makes it illegal for a debt collector to communicate with any person other than you or your attorney about your debt. When a debt collector leaves a message on your answering machine (does anyone have these anymore?) or voicemail, it runs the risk that other people will overhear that a debt collector is contacting you. Embarrassing, right? According to FDCPA case law here in Minnesota, if a debt collector leaves a voicemail and mentions that you owe a debt, it may be breaking the law if a third party overhears it. If so, you may be entitled to $1,000 statutory damages plus any actual damages you incurred (such as emotional distress damages for invading of your privacy). The best part? You get your attorney's fees from the debt collector.

How to stop fraudulent debt collection calls

I occasionally get calls from people dealing with debt collection scammers. The scammers acquire an innocent consumer's contact information and begin bombarding him with debt collection calls. The callers, who usually call from overseas with a VOIP phone line, make blatantly illegal threats, such as threatening to have the consumer arrested. When I talk to victims of this scam, I usually explain the nature of the scam and tell them that an FDCPA lawsuit isn't appropriate because there's no way to identify the scammers. But I've never really had a good answer for making the annoying calls stop. Until now, that is, thanks to "Steve". Steve (it's not his real name) was an innocent consumer suffering from this very problem. Rather than live with the harassing calls, Steve decided to set up a website with information about how to put a stop to the calls. Here's his tips for protecting yourself:

• Inform your employer.  You are likely getting calls at home and/or at work, so make sure your employer is aware the calls are part of a scam and to not take them seriously.  Advise the callers that they are no longer allowed to call you at work.  If they continue to call, document the date and time of the calls you received.  Save voice mails left if at all possible.

• Change your number(s).  For some this may not be an option, for others a one-time number change can be done free of charge.

• Use Google Voice.  Google Voice is a great replacement voice mail system for just about any phone number you use.  Messages can be transcribed and voice mail recordings can be saved as mp3 files. Pro Tip - call the fraudsters with a Google Voice number before turning off your old phone numbers.  Make sure when you call you identify yourself so they can start up their script.  At any point after they have your information pulled up just hang up.  They will then start religiously calling your Google Voice number.  At this point, you are free to change your regular phone number(s) and enjoy not having these people ever call you again. 

Can a debt collector call my parents about my debt?

Under the Fair Debt Collection Practices Act, debt collectors can only communicate with you or your attorney about your debt. There's a very narrow exception that allows debt collectors to contact third parties, such as your parents, but only to obtain location information. Location information means your address and telephone number. During this conversation, the debt collector must tell your parents that he is attempting to confirm your location information, he can't tell them that you owe a debt, and he is only allowed to identify his employer if asked. Of course, your parents have no obligation to give the debt collector your address and telephone number. And once the debt collector has your location information, there is no permissible reason under the FDCPA to contact your parents, or any third party for that matter. In other words, if you've already talked to a debt collector and he knows how to contact you, it's a violation of the FDCPA for him to call a third party because he already knows your location information.

It's fairly common for debt collectors to contact people's parents about their debt. And it's not just college students and recent college graduates. I've had clients in their 40's and 50's whose elderly parents were called by debt collectors. I suppose it's possible that some debt collectors contact consumers' parents by mistake. But I also think that some debt collectors call people's parents as a collection tactic to put pressure on the consumer to pay the debt. Either way, its a violation of the FDCPA, unless it falls under the very narrow "location information" exception described above.

Debt collectors are increasingly trying to collect debts from people that don't owe them

A recent Washington Post story highlights a growing problem, which the story calls debt "tagging". Debt tagging happens when a collection agency tries to collect from someone that doesn't owe the money. In some cases, it appears to be an honest mistake. For example, the collectors may accidentally pursue someone with the same name as the person who owes the money. In other cases, it appears to be intentional. The article tells the story of a Rhode Island woman who was pressured to give her social security number to a debt collector. Shortly after, she received a bill for $4,197 from a electric company for a home in Connecticut. The woman never lived in Connecticut. Only after many calls were made on the woman's behalf, did the collection agency stop.

And even when it's an honest mistake, the innocent consumer can have a very difficult getting the collector to stop. The main problem is the lack of information passed from collector to collector. It's well know that many debts are sold, often several times. As the debt bounces from collector to collector, very little information is passed along. So a consumer being pursued for a debt that she doesn't owe has a difficult time getting the debt collector to acknowledge its mistake because there's often no way for the collector to verify the consumer's story. And debt collectors are trained to assume the consumer owes the money unless they can prove otherwise.

The story advises that people being pursued for debts they don't owe should send a certified letter to the collector explaining why they don't owe the money. If the collection calls continue, the consumer should consult a lawyer.

'Debt tagging' by collection agencies a growing problem | The Washington Post | August 8, 2010

Can I record phone calls from debt collectors?

If you've been getting harassing calls from debt collectors, you can fight back by recording your phone calls to catch them in the act and prove they've violated the FDCPA. Depending on what state you live in, it may or may not be legal to tape-record your phone calls. Minnesota is a one-party consent state, meaning that you can record a phone call without another party's consent, as long as you are one of the parties to the call (you can't record a call between two other people). Your cell phone may have a recording feature. Otherwise, you can buy a telephone tape recorder for a pretty reasonable amount of money.

There are two types of recorders we've used in the past. One is designed for landlines. It has a telephone cord input and output, and you just run the phone cord in and out of the device. Here's an example.

The other is designed for cell phones. This is an adapter that plugs into a regular recording device. It comes with an earpiece that you insert into the ear you're holding your phone up to. It picks up both ends of the conversation through the sound coming out of the receiver. Here's an example of one of these.

Even if you live in two-party consent state--one where you are not allowed to record calls without the other party's consent--here's a little trick. You know how debt collectors sometimes play a recorded message saying "This call may be recorded for quality purposes?" Try using the very same line on them. If they don't hang up, you can feel free to tape away. At the very least you may confuse the caller too much to give you any trouble.

How to request validation of a debt

The Fair Debt Collection Practices Act (FDCPA) gives consumers the right to request validation of a debt. Under the FDCPA, a debt collector must send you a written notice within 5 days of their first communication with you. The notice must tell you, among other things, about your right to request validation of the debt. In my experience, consumers should almost always request validation of the debt, particularly if a debt buyer is involved, because the more information you have, the better.  But here are a couple things to keep in mind about the validation process:

• You must request validation in writing and you must request it within 30 days of your receipt of the required notice. Under the FDCPA, a debt collector doesn't have to honor a request for validation unless it's in writing and unless they receive it within 30 days of your receipt of the notice. As a practical matter, many debt collectors will honor a verbal request for validation and some will even honor a request made after the 30 days. But if you want to protect your right to have your debt validated, you must do it in writing and within 30 days. I recommend sending the letter via certified mail so that you can prove that they received it and when they received it.

• Once you've properly requested validation, the debt collector must cease all collection attempts until they provide it to you. There are some websites that claim that a debt collector must validate a debt within 30 days and if they don't the debt is forgiven. This is simply not true. There is no time limit to how long the debt collector has to validate your debt. They just can't call you, write you, sue you, or take any other action until they validate. If they do, they've violated the FDCPA.

• A debt collector can't use your failure to request validation of a debt against you. The FDCPA prevents collectors from using your failure to request validation as evidence that you owe the debt.

• There aren't any clear requirements about what type of documents are sufficient validation. The FDCPA doesn't define validation, and the FTC has said that validation only needs to confirm that the debt collector is pursuing the right person and the right amount.

• Collection activity during the 30 day validation period can't "overshadow" your right to request validation. This can be a little tricky, but here's an example: let's say you receive the validation notice on March 1 and then they serve you with a lawsuit on March 5. Under the FDCPA, you have 30 days--or until March 31--to request validation. And in Minnesota you have 20 days--or until March 26--to respond to a lawsuit. So because you have to answer the lawsuit before your time to request validation is up, the lawsuit "overshadows" your right to request validation. This is a violation of the FDCPA.