Sunday, February 8, 2009

FAIR Debt Collection

While we are waiting for Congress to decide if the economy is worth saving, making up their minds if home ownership is a thing of the past, we should all be aware of what DEBT COLLECTORS can and cannot do LEGALLY. (While some of these rules are Massachusetts specific, many are not. Where possible annotations will be made. The Massachusetts Regulations are being used as a base because they are actually more stringent and strict than the federal Fair Debt Collections Practices Act - "FDCPA")

The primary difference, between many states' and the federal rules, is that the federal rules apply to Debt Collectors which specifically leave out a collector in the employ of the actual original creditor. For instance, a Debt Collector is an agency, call it the "XYZ Collection Agency", working for the "Bank of Wherever". On the other hand, if a bank employee, from the bank's own collection department calls trying to collect a debt, the FDCPA does not view that as a Debt Collector, which would trigger many of the protections. Massachusetts law regards employees of a creditor and collection agencies in the same light.

(NOTE: For the sake of ease, where the Federal Rule is stricter the note "FR" will appear after the item)

Collection Agencies and Creditors MAY NOT

1. Call you at home about one debt more than twice in any 7 day period, or more than twice in a 30 day period at any place else, like your place of work

2.Call you at work if you ask that they not. Unless the request is put in writing by you, the request is only good for 10 days. Put it in writing and send it certified return receipt requested. Then unless you specifically allow such calls, they are banned totally.

3.Call you without identifying the name of the creditor and collection agency for which the call is being made, and the name of the person calling. He/she can use a fake name, but the creditor/agency must be able to state who the person really is.

4. Contact you at all if you state that you are represented by an attorney (give them the attorneys name as a safety measure)

5.Use profanity or obscene language FR

6.Threaten you with legal action that the creditor/collection agency or does not take or expect to take "FR"

7.Tell anyone, except an attorney whose name you have given to the collector, about your debt, or that you even have one. The exception is if you give the collector written authority to do so.

8.Mail you anything that would lead anyone to believe that you have a debt (sending a postcard or using a return address like "XYZ Collection Agency, 5 Nasty Lane,..." or "XYZ Visa, Collections Department, ...."

9.Ask you to send post-dated checks "FR"

10.Call you outside of normal waking hours. If the caller does not know, 8am-9pm is allowed. If you state that you work nights and sleep days, any call during the day will be a violation

As delinquencies and other late payments increase, collectors, both in-house and working for an agency, will become significantly more aggressive. That has already started. Many collectors work on a strict commission basis, so getting you to send anything is good for the collector. Even getting a promise to send money by a certain day can bring the collector a commission. Remember, when all is said and done, a collector is a salesman - he/she is selling you the need to pay, even if you cannot.

Do not fall for the line "Well, I see on your credit report that you still have $1,200 left on the ABC Mastercard. Why don't you use that to pay us. I will be glad to take your card information over the phone. That will stop us from taking you to Court next week" DO NOT DO IT!!!! In addition to taking money that you cannot pay back, you are allowing yourself to be bullied and are permitting the collector to act illegally. Get his name, the company name and a return telephone number. Send the information to the Attorney General's Office, Division of Consumer Affairs, or the equivalent in your state.

More about creditors, and credit card companies in particular, within a few days.

As always, if you have a specific question, e-mail or call me. Please state that you have a question related to this BLOG.

Author's Copyright by Richard I. Isacoff, Esq, February, 2009

1 comment:

Anonymous said...

Hi, If you are an incorporated business, how often can you be called in a week?