Michael O’Reilly, a commissioner at the Federal Communications Commission, caught the attention of consumer advocates, businesses, debt collectors, legal professionals, and others when he wrote in a March 25 blog that the Telephone Consumer Protection Act needs clarification.
TCPA lawsuits have increased more than 30 percent in the last year, he said, while several dozen petitions are being submitted to the Commission in search of clarification.
O’Reilly also wrote that the FCC should take a hard look at its own precedent that may have contributed to enlarging the scope of TCPA violations.
Those in the debt collection industry and other businesses were pleased with the commissioner’s comments, saying they are cautiously optimistic that the FCC could issue clarifications that can help reduce lawsuits.
Consumer advocates, however, said they are concerned that the so-called clarifications that are being sought are nothing more than an attempt to limit the scope of the TCPA and make it less useful in protecting consumers.
The TCPA was enacted in 1991 amid consumer complaints over unwanted solicitation calls to American homes. As technology evolved over the years, so did the courts’ interpretation of the TCPA, which now applies to robocalls, text messages, junk faxes, and calls to cell phones.
Mark Schiffman, a spokesperson for the American Collectors Association, a trade group representing debt collectors and creditors, said the confusion was compounded when attorneys used the lack of clarity to file lawsuits against debt collectors who were contacting debtors. He said that that was one of the reasons there has been a rise in TCPA lawsuits.
He said that one area that would need clarification from the FCC is that the TCPA should not apply to debt collectors.
“Debt collector calls are not telemarketing calls,” he said, adding that the TCPA was enacted with telemarketers in mind. “They are calls to consumers over a legitimate business issue.”
Schiffman also said the TCPA allows the use of autodialers to contact consumers at home, but prohibits autodialing to cell phones. That imposes a burden on businesses that may need to contact a large number of consumers, he said.
Such rules affect not only debt collectors but also other businesses that need to communicate with consumers, not for telemarketing but for other business purposes, he said.
“This is a broader business issue, not just a debt collection issue,” he said.
Schiffman added that the ACA is among those who have submitted a petition to the FCC asking for clarification on a number of TCPA issues.
Matthew Gibson, an attorney at the Paul Hastings law firm who represents clients on regulatory issues, including the TCPA, said that one of the thorniest issues with the law relates to the definition of what is an autodialer.
He said there is uncertainly on what devices and systems can be considered autodialers – which cannot be used for calling consumers’ cell phones without the consumers’ consent.
“The FCC has not fully weighed in on what does and does not constitute an autodialer under the TCPA, so it has been left to the courts on how best to interpret the law’s definitions, and there are varying interpretations,” he said.
In one ruling from November 2012, the FCC said that an automatic dialing system includes “any equipment that has the specified capacity to generate numbers and dial them without human intervention regardless of whether the numbers called are randomly or sequentially generated or come from calling lists.”
That definition is broader than the one in the TCPA, in which a device must use a random or sequential number generator in order to be considered an autodialer.
In interpreting that definition, some courts have gone as far as ruling that callers may violate the TCPA even if they manually dial a number if the device they used is capable of making automated calls.
Aside from the definition of autodialers, not everyone agrees on what constitutes consumer consent, what types of faxes are considered unsolicited, or what it means to initiate a call, to name a few.
Gibson said the FCC recently released two decisions (this and this) that clarified issues relating to automated text messages.
“The FCC’s actions were great first steps in clarifying some of the ambiguities,” Gibson said. “This is encouraging, and we look forward to action from the FCC on the remaining positions.”
Consumer advocates, however, say the petitions for clarification are really not a quest for clarification, but an effort to leave the consumer with little legal protection.
Scott Nelson, an attorney at Public Citizen, a Washington, D.C. consumer advocacy group, said the FCC has held the position that autodialers cannot be used to call consumers’ cell phones.
Through petitions for so-called clarifications, “the [collection] industry wants to use autodialing equipment to call people’s cell phones,” he said.
If there is a need for clarification, it is in those areas where the collection industry is not pushing for clarity, he said.
One example is whether companies are responsible for robocalls or junk faxes that their agents send to consumers at their behest, he said.
Nelson said he was surprised by O’Reilly’s blog post, and said he hoped that the position is O’Reilly’s own opinion and not one shared by the entire Commission.
“I think he is sending a signal that he is amenable to giving industry a break and limiting the protection that the law gives to consumers,” Nelson said. “I am not really sure why there is any reason to do that.”
Article Source: TCPA Clarification Efforts May Undercut Consumer Rights
The Federal Trade Commission Thursday announced a settlement in a long-running case against two debt collection agency owners and their network of companies that threatened lawsuit and arrest over debts consumers often did not owe.
The two principal owners of Rincon Debt Management, Jason R. Begley and Wayne W. Lunsford, will surrender more than $3.3 million worth of assets that will be used to provide refunds to victims, under the settlement with the FTC. The two defendants also are permanently banned from the debt collection business.
Litigation continues against several companies that Begley and Lunsford (no relation to the author of this report, by the way) used as part of their debt collection scheme. The Corona, California-based operation collected debts nationwide.
The settlement resolves FTC allegations that from April 2009 until October 2011, when a court shut down the operation at the FTC’s request, Begley and Lunsford deceived and abused Spanish- and English-speaking consumers – making bogus threats that consumers had been sued or could be arrested over debts they often did not owe.
“These debt collectors focused on Spanish-speaking consumers and other people who were strapped for cash, and preyed on them by using abusive collection tactics in violation of federal law,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.
The FTC’s complaint alleged that the defendants violated the Federal Trade Commission Act and the Fair Debt Collection Practices Act (FDCPA) by calling consumers and their employers, family, friends, and neighbors, posing as process servers seeking to deliver legal papers that purportedly related to a lawsuit. In some instances, the defendants threatened that consumers would be arrested if they did not respond to the calls. The defendants and their employees also masqueraded as attorneys or employees of a law office – demanding that consumers pay “court costs” and “legal fees” – even though the operation did not file lawsuits against consumers, the FTC alleged. Also, in many instances, consumers did not even owe the debt the defendants were trying to collect.
In addition to the permanent ban on participating in debt relief services, Begley and Lunsford are prohibited from misrepresenting the features of any financial products or services, including lending, credit repair, debt relief, and mortgage assistance relief services.
The order imposes a $23 million judgment against the defendants, which will be suspended due to their inability to pay, except for the $3 million in frozen funds held by the receiver and the personal assets both agreed to surrender. Begley is required to surrender the rights to more than 3,500 American Eagle silver and gold coins. He will also pay a $176,115 contempt judgment for having sold his home and some other coins in violation of the asset freeze that was imposed as part of the FTC’s case. Lunsford is required to pay a $134,000 contempt judgment for the proceeds he received when he sold his home in violation of the asset freeze.
If it is determined that the financial information the defendants gave the FTC was untruthful, the full $23 million judgment would become due.
The Commission vote approving the proposed consent judgment was 4-0. The FTC filed the proposed consent judgment in the U.S. District Court for the Central District of California and the Court approved it on March 28, 2014.
Source: Debt Collectors Settle with FTC for $3.3 million, Permanent Ban from Collecting
The old formula to build better credit went something like this: apply for a few credit cards, use them for affordable purchases such as groceries, utilities or gas; and then pay them off completely when the statement arrives each month, to show the bank that you can manage your credit responsibly.
In today’s world, that old advice needs to be updated. Try these ideas:
Like an annual medical checkup, make sure your credit report is in good shape.Once a year, all consumers are entitled to a free credit report. We recommend logging onto www.annualcreditreport.com and getting yours there, as the report you’ll receive is comprehensive and generally more reliable than those companies that like to advertise such things on television. A credit report is your “resume” for banks and other creditors to review when considering how much credit to extend to you. The report includes both good and bad information, but also can hurt you by including old, outdated, disputed, or inaccurate information. Make sure to check for accuracy too. If you find errors, it is vital to dispute the item with the reporting credit bureau(s) immediately. This can have the positive impact of increasing your credit score, making you a more attractive consumer to creditors and make it much cheaper to borrow money.
Schedule payments through online banking or set alarms on your cell phone to remind you when payments are due. About a third of your credit score is comprised ofwhen payments are made. Your payment history is important, making it a good idea to schedule recurrent bills on “auto-pay” using your online banking profile with your bank. As to one-time bills which are not recurrent, set up reminders on your cell phone to make sure they are not forgotten. Doing both makesa tremendous difference on your credit score!
Think outside the box. Another way to keep a credit score moving in the right direction is by being vigilant about what is reported and taking the time to dispute chargesthat are not accurate or not owed.A dispute in writing requires the credit reporting agency to respond properly and do an investigation. If your position is correct, the item must be removed from your report, and if not, permits legal action to be pursued to force removal, along with the recovery of damages. If correcting inaccuracies is too difficult or time consuming for you to do yourself, enlist the help of a consumer attorney who specializes in Fair Debt Collection Practices (FDCPA) and Fair Credit Reporting Act (FCRA) cases, as mistakes are made and they can be costly to you.
Fight with debt collectors if you are right. If a debt collector is violating your FDCPA rights, an experienced consumer attorney can help, and can win you a statutory award of up to $1,000. Better still, they can represent you for free, by requiring the debt collector to pay all attorney fees and costs as required by law.
Whether you follow any of the above suggestions, remember that your good credit can often make the difference in being approved at reasonable rates, It is worth the effort!
3 Ways to Build Credit – Without Using Credit Cards
Common Errors in Credit Reports
The following article is written by Michelle Singletary of the Washington Post. The Consumer Financial Protection Bureau is looking for your input in making debt collection laws even tougher. If you would like to share your input or suggestions, visit www.regulations.gov.
WASHINGTON — If you owe a debt, you should make every effort to pay it. After all, you’ve enjoyed the services or goods that your debt bought. And companies have a right to try to collect or even sell that debt to recoup their money. The more they can collect, the less likely they are to pass on their debt troubles to other consumers in the form of higher prices or the cost of credit.
But consumers have a right to accurate documentation to back up the collection efforts. And certainly folks who don’t owe a debt shouldn’t be harassed or bullied because of some computer error or faulty debt data.
And this is where the Consumer Financial Protection Bureau comes in. The watchdog agency is considering rules for the debt collection market, but before it writes any new regulations or strengthens those already on the books, the agency wants the public to weigh in on an array of issues involved in debt collection.
Among the agency’s chief concerns is making sure debt collectors have the correct person, debt and documentation.
“It is widely recognized that problems with the flow of information in the debt collection system is a significant consumer protection concern,” the agency said in its advanced notice of proposed rule-making.
Often when debt is sold to collectors for pennies on the dollar, the sale doesn’t include a lot of information about the debtor or his or her debt. The documentation might include nothing more than the person’s name, last known address, Social Security number and debt amount. Several states have implemented new laws, court rules or administrative orders requiring more specific proof of debt from companies who sue consumers to collect on outstanding debts.
Even ACA International, a trade group for the consumer debt-collection industry, believes some updating is in order.
“Current federal debt collection laws are woefully outdated when it comes to areas such as communication, documentation, verification and statutes of limitations,” ACA said in a statement. “We agree that modernizing the nation’s consumer debt collection system is important so long as changes are based on common-sense solutions that preserve balance between consumer protection and the ability of a creditor or debt collector to lawfully recover debts.”
Collectors have a limited number of years in which they can sue someone for payment. After the time runs out, unpaid debts are considered “time-barred,” meaning that collectors can contact you about the old debt but not seek a remedy through the courts.
You may not have the inclination to read the CFPB’s 114-page rule-making proposal. I wouldn’t blame you. It’s pretty dense and includes nine parts with 162 sets of questions about debt collection. Yet the first set of questions in the proposal gets to the heart of this issue for consumers, which is what information is transferred during the sale of debt or the placement of debt with a third-party collector and whether the information transferred varies by type of debt (e.g., credit card, mortgage, student loan, auto loan).
Other questions ask whether the length of time that debt collection records are retained should relate to how long a debt may generally be noted in a consumer report or how long a consumer has to bring private action under the Fair Debt Collection Practices Act, which was enacted in 1977.
I think the core of any rule proposal has to require that when debt is sold or transferred, it should include specific and standardized proof or underlying documents related to someone’s debt as part of the sale.
Consumers can submit comments at Regulations.gov. But a far easier place to learn about the issues and problems with debt collection is RegulationRoom.org, which is not a government-run site. Instead, trained students and staff at Cornell Law School run it. The CFPB is working with Cornell to make it simpler for people to submit comments about debt collection.
Even if you aren’t interested in commenting, you can learn a lot about debt-collection practices and your rights. In discussion forums, people can submit comments and moderators keep things civil and provide background information. They also probe, asking follow-up questions to those who submit comments or gripes in order to dig deeper into the issues they face.
Comments submitted at RegulationRoom.org will be summarized and submitted to the CFPB before the end of the official public comment period.
I know you may not think you have a voice. But you do. Here’s your chance to put in your 2 cents’ worth. What’s been your experience with debt collectors? What changes do you think should be made? Don’t be a spectator in this debate about debt.
As debt collectors become more invasive in contacting consumers, spoofing has been utilized with greater frequency. Spoofing is a calling scheme that allows a telephone caller to fool the caller ID system of the recipient. Unfortunately, the law has yet to catch up with the problem as is so often the case, allowing ‘spoofing’ to continue unabated, much to the aggravation and detriment of consumers, who can and are often fooled by the caller as being someone other than who they claim to be.
How does spoofing work?
Instead of the name of a person, company or 800 number, the caller ID screen of the recipient will display whatever label the caller wishes to show up, such as “Customer Service” or “Law Office”. The goal of spoofing is to get the recipient to pick up the telephone by fooling him or her into believing the caller is someone else.
The Truth in Caller ID Act was signed into law Dec. 22, 2010, prohibits caller ID spoofing for the purposes of defrauding or otherwise causing harm. In June 2010, the Federal Communications Commission adopted rules implementing the Truth in Caller ID Act.
A 2012 case out of the Fifth Circuit Court of Appeals cited non-harmful spoofing as including a domestic-violence victim trying to hide her whereabouts or a consumer guarding his or her call-back number from a company. Unfortunately, that well-intended use has been turned around by businesses such as debt collectors, who use it to make “non-harmful” changes to their called ID signature, hoping to fool the consumer into picking up the phone.
An online search for “caller ID spoofing” returns dozens of pages of entries of companies who assist businesses in spoofing consumers. Services such as SpoofCard, offered 60 minutes of disguised calling for $9.95. If the calls are placed “with the intent to defraud, cause harm or wrongfully obtain anything of value”, the spoofing is unlawful. Notably, using another person’s phone number, or using a fake number, is not yet seen as an act of fraud.
The FCC advises consumers to never to give out personal information over the phone. Consumer advocacy attorneys say to document calls by keeping a phone log in the event the caller is later identified as being a debt collector, because the Fair Debt Collection Practices Act (FDCPA) prohibits such deceptive acts. Under the FDCPA, consumers are entitled to free legal help and up to $1,000 from the offending debt collector.
An investigation by Canada’s federal regulatory arm, Canadian Radio-television and Telecommunications Commission (CTRC), found one of the country’s largest debt collectors iQor Canada Ltd guilty of violating consumer rights. Chiefly iQor was accused of using robocalls in an attempt to reach consumers at all hours of the day and night, and not identifying on whose behalf they were calling.
The CTRC investigation from Oct. 15, 2011 to Feb. 28, 2013, revealed that there were 60 violations for making automated calls outside the allowable calling hours of 9 a.m. to 9 p.m., and that between Oct. 15, 2011 and Nov. 2, 2012, the CRTC found that there were 40 violations for not starting the call with a clear message. And, while not punishable by law but arguably even more incendiary, the debt collector made many of the calls to people who owed no money at all.
The rules, as mandated by the CRTC, specify that the calls must disclose the person or company on whose behalf the call was being made. Each of the 100 offences carries a $5,000 charge, for a total fine of $500,000.
iQor Canada Ltd., based in Toronto, has until Nov. 15 to pay the fine. Along with its affiliated company in the United States, doing business as Allied Interstate, is one of the most frequently sued debt collectors in North America.
A deceptive-practices lawsuit against Pressler & Pressler, New Jersey’s largest collections firm, is moving forward as a class action.
U.S. District Judge Katharine Hayden in Newark certified a class of individuals who allege misrepresentations in a form letter they received from the debt-collecting firm.
The form letter in question offered to settle and said once that was done, proof that the debt was paid would be sent to the court and “to you so that you can advise the credit bureau.” Attorneys in the matter say that they believe Pressler never actually reported the supposed delinquencies to any credit bureau.
Attorneys for the class consumers assert two misrepresentations were made by the debt collector law firm: the implication in the letter that the collector had reported the debt on the recipient’s credit report, and a misleading statement that settling the debt would help improve the credit reports.
Williams v. Pressler & Pressler consists of 75 members of the class of consumers who are suing, alleging they were sued for credit-card debt by New Century Financial Services. New Century purchases delinquent accounts and is closely affiliated with the law firm.
Gallagher, Mary Pat. “Suit Against Collections Law Firm Wins Certification as Class Action.” njlj.com. 27September 2013.
Lawsuit alleges Allied Interstate charged hidden fees after settlement offers have been accepted
Third party debt collector Allied Interstate of Columbus, Ohio, allegedly failed to inform credit-card holders who defaulted on payments and then accepted settlement offers, that interest on the debt would continue to accrue, according to the suit, Luna v. Allied Interstate filed in early October.
Class representative Justina Luna of Bound Brook (IDENTIFY THE NAME OF THE STATE) alleges she received a collection letter on or around September 10, 2012, claiming from her an amount due and payable. The letter was silent as to other charges such as interest.
Nine months later, another letter arrived, claiming a debt totaling $272 with an offer to settle for $177. This June 25, 2013 letter was the first time Allied notified the reader that “the creditor continues to assess interest on the debt and you may owe an additional amount after we receive your payment.” There was no offer to reduce the debt in the second letter as the first one had.
According to the suit, failing to state interest would continue to accrue on the unpaid principal was a violation of the Fair Debt Collection Practices Act (FDCPA) prohibition on false or misleading representations.
Consumers are often unaware what protections the law provides from aggressive debt collectors.
According to the FDCPA a debt collector cannot:
- Fail to properly identify the origin of the contact as being from a debt collector attempting to collect a debt.
- Use vulgar or obscene language when speaking with you
- Use threats of violence or criminal action to harm you, your property, or your reputation
- Give debtor information out to third parties
- Call repeatedly
- Call at ‘inconvenient times or places,’ especially once you have notified them to stop
- Misrepresent themselves as attorneys or representatives of the government
- Misrepresent documents sent to you as legal papers when they are not
- Fail to inform you within 5 days of initial contact, the total amount you owe, who it is owed to, the time available to dispute the debt and that any information they are given will be used to collect.
The Victoria’s Secret complaint seeks recovery for New Jersey consumers who received the offending collection letter from Allied. It seeks statutory damages, attorney fees and litigation costs, and any other relief ordered by the court.
Toutant, Charles. “Victoria’s Secret Debt Collector Allegedly Used Illegal Tactics.” njlj.com. 13 September 2013.
Are you being contacted by phone and mail about a debt that you owe but haven’t paid or can’t pay? Maybe you are being called about somebody else’s debt? Does it seem like your phone won’t stop ringing or that you are threatened that calls will continue until you have cash to pay? Do you feel like you will never have any peace as long as you owe money? You’re not alone.
Many consumers today feel this way, but the key is to understand your rights to stop the calls and as soon as possible, take control of your finances. Here’s a how to list:
Don’t be intimidated
Shame and embarrassment are not the penalty for owing money. After all, the average US household credit card debt stands at $15,325, making it is far more common than being debt free. Paying down debt may play heavily on your mind, but it should not allow you to fall victim to the psychological tricks that collectors may try to coerce payment, especially if you aren’t able to afford it at that time. Take a deep breath, don’t panic, and be prepared.
Make the first move
If a debt collector calls, know what you will say in advance. Maybe prepare some notes and leave them by the phone. Be confident.
Tell them to stop
Once you have a collector on the phone, get their name and operator number, then tell them that you would like to exercise your right to demand that they stop contacting you by telephone or mail. To make it foolproof, send a similar request in writing with green card proof of delivery, keeping a copy for your records. It’s that simple – if they continue to contact you they violate the Fair Debt Collection Practices Act (FDCPA).
Do your research
Think about it: the collector on the other end of the phone knows nearly everything about you; your phone number, your home address, your career, and your credit score. What do you know about his company and why talk to anyone about finances without first knowing the caller? Go online and find out which state they are based in, the company structure, and complaints other consumers have made about them. Don’t rule out the possibility that the “collector” isn’t a collector at all, but merely a scammer trying to extort money from you.
Guard your identity and financial information
Collectors are strangers, calling to obtain personal financial information. Don’t assume that the collector is legitimately entitled to collect and never give out your social security number, bank account number, credit card number, balance in your bank account or other financial material. Don’t discuss other creditors or other bills and don’t reveal the name of any employer or other information. What is said on the phone often can be used by the caller to commit fraud or take your money without authorization. If you don’t guard your financial information properly, who will?
Make them do their research
Always seek validation/verification of the debt, even if you think you know it well. You may find it is another debt entirely, or something else that may lead you to not pay either because the debt is stale (too old), is not owed, was previously paid or is not yours at all. Many times the debt collector has their facts wrong. Make the debt collector prove that the debt is yours and not beyond the statute of limitations. Unsure? Call a consumer lawyer to ask.
Keep a record
Start writing things down. Keep a journal for every time you are contacted, and make notes of any accusations, misleading statements or harassing behaviors. This journal will prove immensely helpful if the collector does overstep boundaries and violates the FDCPA.
Talk to a lawyer
If you think you are being victimized by a debt collector that isn’t respecting the FDCPA, or you are unsure, contact an experienced consumer attorney. The law provides for the right to seek up to $1000–and payment of attorney’s fees. An experienced FDCPA lawyer will take your case without any payment from you. Even if the harassment isn’t severe enough to warrant a lawsuit, keep this in mind: once you have legal representation, collectors have to leave you alone and direct all contact to your lawyer.
If you are in debt or have defaulted on loans, there are ways to stop collection calls. If you feel that you may have a case, call 1-800-NOT-FAIR – your number for stopping abusive debt collectors.
Source: Turn the tables on debt collectors