Debt collectors can’t 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.

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Ready to talk to a lawyer about stopping debt harassment?
Schedule a free consult with FDCPA attorney Todd Murray.

Todd has been suing harassing debt collectors since 2009. He has recovered hundreds of thousands of dollars for his clients and has held the debt collection industry accountable when it resorts to illegal collection tactics. Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.

What is debt collection harassment?

Although it sounds like an easy question, there has been a lot of litigation over what exactly is considered debt collection harassment under the Fair Debt Collection Practices Act. It's often a question that turns on the unique facts and circumstances of each individual case. But based on the text of the FDCPA itself and the related court decisions, it can be said with some certainty that the following tactics are collection harassment:

• Debt collectors cannot threaten violence to collect a debt. This one is pretty common-sense. This prohibition also covers threats against your children, friends, and other third parties.

• Bill collectors can't use profane or abusive language. Obviously different people have different definitions of "profane or abusive". But at least one court has ruled that name calling and racial or ethnic slurs are profane and abusive.

• Collectors can't call you repeatedly. This not only applies to actual telephone conversations, but also to causing the phone to ring. For example, redialing your number after you've hung up the phone.

• Debt collectors must tell you who is calling. In virtually every communication, the debt collector must identify himself and notify you that he is a debt collector. But there is some debate about whether collectors can use a consistent alias. Not surprisingly, many collectors would rather not use their real name when on the job. So some courts have allowed the use of aliases.

• Any other debt collection conduct where the "natural consequence" is to harass, oppress, or abuse. This is the catch-all provision. Again, it can be tough to define what conduct has the natural consequence to harass, oppress, or abuse. In some cases, it's easy. In other cases, it's more difficult. Courts have said that mere "bad manners" is not harassment. But the use of words like "liar", "deadbeat", or "crook" probably cross the line and would be considered harassment.

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Ready to talk to a lawyer about stopping debt harassment?
Schedule a free consult with FDCPA attorney Todd Murray.

Todd has been suing harassing debt collectors since 2009. He has recovered hundreds of thousands of dollars for his clients and has held the debt collection industry accountable when it resorts to illegal collection tactics. Todd’s clients have described him as “very professional and easy to work with.” He lives in Minneapolis with his wife and four children.