I’d like to thank Jon for letting me post on his blog. Jon is a very genuine and sincere person, which makes him all the better at his job. Law blogging is all about sharing wisdom and giving a little help to people – also reasons Jon and I practice law.
No, a debt collector can’t threaten you with a baseball bat
And that’s a good thing. There are other limitations out there on what a collector can and cannot do. I’ll be posting a bit more over the next week on collections matters beyond the scope of this post. Let’s jump right in!
Two major laws govern consumer collections in Wisconsin. One is the Wisconsin Consumer Act, the other is the Federal Fair Debt Collection Practices Act (FDCPA), the latter being the law we’ll discuss today. As a matter of background, the FDCPA was passed by Congress in 1978 because of pervasive abuse of consumers by debt collectors. Examples of abuse at the time included threats of violence, obscene/abusive language, calls at all hours of the night, and disclosing your debts to anyone who would listen (like your mother!). As you can see, not a pleasant environment.
Specifically, the FDCPA applies to consumer debts, consumers being person (not a business) who is obligated to pay any debt, including spouses and parents if the person is a minor. Usually, the debt is for money that was exchanged for most kinds of consumer property, such as items used for personal, family, or household purposes. Debt collectors are entities hired by the creditor (business/persons) to collect on the debt.
While a comprehensive list of activities debt collectors are forbidden to use would be lengthy, there are several major actions the collector cannot take, including:
l Misidentifying themselves or make misleading statements while tracking down a debtor. For example, collectors can’t masquerade as government officials or threatening to garnish wages (unless the creditor has a judgment by a court and can take such actions under the law) .
l Contacting the consumer if they know the consumer is represented by an attorney. In that case, the collector must speak with the attorney and not the consumer. Should a consumer have a lawyer, the consumer should probably let the attorney know of the debt-related situation and advise the collector of that he or she is represented.
l Harassing actions, such as threatening violence against the debtor (no ball bats or brass knuckles), using obscene language, or publishing the debtor’s name to the public as a “bum” or the like.
l Contacting anyone about the debt who is not the consumer, the consumer’s attorney, the creditor, or the creditor’s attorney. Basically, FDCPA views the collection matter as more or less a private affair.
l Directly contacting if the debtor has, in writing, told the collector to cease contacting him or her or has stated a refusal to pay the debt.
Bear in mind that there are other obligations on the collector, but the above focuses on a few of the “no-no’s”.
Fortunately, the FDCPA allows consumers some remedies if the collector gets overzealous and breaks the rules. Violations of the FDCPA are generally recognized as easy to allege, hard to defend. If a consumer is successful in a violation claim under the FDCPA, he or she can recover three types of damages: (1) actual damages (usually small), (2) additional damages not in excess of $1,000 (most common remedy), and (3) costs/reasonable attorney’s fees (guess who wrote this statute?).
The FDCPA requires courts to ask three questions when determining the debtors remedy. First, what was the frequency and consistency of the collectors violations? For example, did the collector call every ten minutes for days on end after 9 p.m.? Second, was the collector persistent in violating the rules? Again, was the collector unrelenting in the face of written notification to cease contact by the debtor? Third, what was the extent to which noncompliance was intentional? Was the collector on notice via writing that the debtor had an attorney and it still kept calling the debtor’s home?
The FDCPA is not an extremely complicated statute, but it is specific on what can and cannot be done regarding consumer debts. If you are struggling with debt and know you are in a hole, find an attorney to help. Alleviating some of the stress caused by collectors can help you center yourself and will aid you in resolving the matter.