Archive for the ‘FDCPA’ Category
The Fair Debt Collections Practices Act, or FDCPA, was enacted to protect consumers from overzealous debt collectors whose methods include harassment, threats and coercion. To these businesses a consumer is nothing more than a number representing dollars and cents, part of the profit margin and nothing more.
These debt collectors view their violations of the FDCPA as a business decision instead of a lawful requirement that may must abide by. Their disregard of this law is clearly expressed in the following insider marketing documents that were sent out to various debt collectors offering litigation services.
UNCOVERED! One Illinois lawyer bragging to Debt collectors how they can skirt the FDCPA!
Each year the Federal Trade Commission (FTC) provides Congress with a report on the Fair Debt Collection Practices Act (FDCPA). While the report focuses heavily on the number of complaints received from consumers, it also summarizes actions that the FTC has taken to “curtail deceptive, unfair, and abusive debt collection practices.”
As in years past, the FTC received more complaints about the debt collection industry than any other industry. In 2009, the FTC received 119,364 complaints about first- and third-party debt collectors, up from 104,766 in 2008—an increase of nearly 15,000 complaints. With that said, it is important to point out that the FTC does not investigate each complaint to determine if there was an actual violation of the law. The FTC acknowledges that not all of the complaints received are violations of the Act. It is also worth noting that although the total number of complaints increased, so did the number of consumers who fell past due on credit obligations. An increase in the number of past due consumers opens the door for an increase in the number of complaints.
We encourage you to download and review the 2010 FDCPA report in its entirety to become familiar with its contents, and if you haven’t reviewed the Fair Debt Collection Practices Act lately, you might consider doing so while this article has your attention.
We review the top five FDCPA complaints received by the FTC in 2009 and point you to the corresponding section of the FDCPA.
#5 Communicating with Third Parties Repeatedly to Obtain Location Information.
“This past year, 19.2% of complaints, or 16,926 complaints, claimed that collectors called a third party repeatedly to obtain location information …”
The FDCPA §804(3) says: A debt collector shall not communicate with a third party more than once unless requested to do so by the third party, or unless the debt collector reasonably believes that the earlier response of the third party was erroneous or incomplete and that the third party now has correct and complete location information.
#4 Threatening Action Which Cannot or Is Not Intended to Be Taken.
“In 2009, 20.9% of FDCPA complaints, or 18,438 complaints, reported that third party collectors falsely threatened a lawsuit or some other action that they could not or did not intend to take…”
The FDCPA §807(5) says: A debt collector shall not threaten to take any action that cannot legally be taken or that is not intended to be taken.
#3 Failing to Send the Required Validation Notice.
“Last year, 25.7% of the FDCPA complaints, or 22,708 complaints, reported that collectors did not provide the required notice….”
The Fair Debt Collection Practices Act §809(a) says: Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice …” (The notice is referred to as the Validation Notice and includes the amount of the debt, name of the creditor, and important information regarding disputes and verification.
#2 Demanding a Larger Payment Than is Permitted by Law.
“This category includes two different FDCPA law violation codes. First, the FDCPA prohibits debt collectors from misrepresenting the character, amount, or legal status of the debt. Other complaints in this category state that collectors have sought to collect on debts that have been discharged in bankruptcy. In 2009, 31.1%, or 27,420 FDCPA complaints, described this conduct.”
The FDCPA §807(2) says: A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. This includes the false representation of the character, amount, or legal status; or any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.
#1 Calling Repeatedly and Continuously.
“In 2009, 46.5% of FDCPA complaints the FTC received, or 41,028 complaints, claimed that collectors harassed the complainants by calling repeatedly or continuously.”
The Fair Debt Collection Practices Act §806(5) says: A debt collector may not cause a telephone to ring or engage any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.”
Article Source: http://www.insidearm.com/thecomplaintsissue/top-five-FDCPA-complaints.cfm
Recently, Credit Law attorney Craig Thor Kimmel appeared with NBC10′s Tracy Davidson on “Survive & Thrive” to discuss how consumers can fight back against debt collection harassment. Here is the clip:
Third party debt collectors break the law by violating the Fair Debt Collection Practices Act (FDCPA). The FDCPA is enforced by the Federal Trade Commission (FTC) to direct and monitor debt collection practices by third party collectors.
The FDCPA has laid down the guidelines for fair collection practices in order to protect consumers from being harassed by mean debt collectors. A creditor has a right to collect payment from you. But, debt collectors by no means are creditors; they are third party collectors and should not be allowed to browbeat you into believing their superiority.
In reality debt collectors are employed for a meager salary by debt collection agencies and are paid based on their collection abilities. Some debt collection agencies buy debts from original creditors for a discounted amount of the original debt. If a debt collector is actually successful in collecting money from you, the collectors take the major share of the money and give the creditors a share of the collection. Some creditors wash their hands off the debt by completely selling the debt. To collect payment on such debts, and to make the most of the debt, collectors resort to unethical means.
Some large financial institutions have large receivable departments like mortgage, home loan and health care companies. These companies employ ‘in house’ collectors to collect their debts. These collectors are not considered as ‘debt collectors’ by the FDCPA and therefore do not have to follow many rules under the FDCPA.
In a recent debt collection case, a consumer from Richmond, Virginia, was harassed by NCO Financial Systems for a zombie debt to such an extent that she ended up seeing a psychiatrist for depression. An NCO Financial Systems agent called her many times during the day and even night. He left messages on the voice mail box if his calls were not attended to. He called neighbors and disclosed details about her debt. He threatened to sue her, seize her vehicle and have her arrested.
NCO Financial Systems agent is a third party collector and not an ‘in house’ collector. NCO Financial Systems violated the FDCPA and can be sued by the consumer in the above case. NCO Financial Systems has countless rip off reports against it. It is considered to be the worst debt collection agency which creates zombie debts.
The FTC watches over the collection industry with eagle eyes but with so many collection agencies mushrooming in the market, the FTC acts if there are a substantial number of complaints about a particular agency.
In 2004, the FTC penalized NCO with 1.5 million dollars fine for reporting inaccurate information to the credit bureaus. Reporting wrong information to the credit bureaus is one of the violations of the FDCPA. Despite a regular array of complaints about it, NCO Financial Systems continues to violate the FDCPA.
Article Source
Consumer Attorney Craig Kimmel discusses consumer rights on KYW TV’s Talk Philly Program:
If you are receiving harassing calls from debt collectors, even if you owe the debt, you cannot be harassed, abused, threatened, or have others told about your debt! You have rights under federal law. Watch video of attorney Craig Kimmel speaking about the Fair Debt Collections Practices Act, sharing some of the abuses by debt collectors and what they can and can’t do.
NBC10 Interview with Tracey Davidson:
Are you a victim of unfair collection practices? Contact us for free legal representation! We collect all fees from the debt collectors not you! We stop the harassment immediately. You may also be entitled to money damages of as much as $1,000 and other damages. Unless you want the calls/letters to continue, call us!
Three out-of-state lawyers, accused of using unfair tactics to collect debts in Colorado, have been banned from collecting debts for periods ranging from three years to life, the Colorado attorney general’s office said Tuesday.
Under a consent decree issued late Monday, lawyer Mar vin Brandon is permanently banned from collecting debts in Colorado; lawyer Jack H. Boyajian is banned from collecting debts in Colorado for five years, and lawyer Karen Nations is banned from collecting debts for three years in Colorado.
Original story from the Denver Post
It’s a decades-old practice known in legal circles as “sewer service”. This occurs when a debt collector fails to properly serve a notice of complaint (litigation) upon the defendant (debtor) and then files a false affidavit claiming the notice has been properly served. When the debtor doesn’t show up in court, the collector can then apply for, and almost always wins, a default judgment. This is a violation of the FDCPA and has become a staple practice for “reputable” and “not reputable” debt collectors alike. If you have been the victim of “sewer service”, contact us today for free representation and immediate relief from the debt collector.
See this story about a class action suit filed in New York regarding this problem: Suit Claims Fraud by New York Debt Collectors
Voicemails from bill collectors are a reality when you have been turned over to collections. The dirty secret debt collectors don’t want you to know about is that they very often violate the law (Fair Debt Collection Practices Act – FDCPA) when they leave a voicemail message.
They know they are violating the law but they still do it anyway.
There are three types of illegal voicemails:
- Illegal threats or lies.
- Third party disclosures.
- Failure to leave the mini-miranda.
Debt collectors often call repeatedly when collecting a debt, leaving messages whenever possible and rely on the fact that consumers often don’t know their rights.
You can read the article in it’s entirety, here: Three Types of Illegal Voicemails from Debt Collectors
Four hundred million times a year, employees of a little-known company called NCO dial the telephone “just to talk.”
NCO’s hope: A simple chat will convince people to pay old debts.
“We have to strike a bond with someone,” said the company’s CEO, Michael Barrist. “We want them to explain their situation to us, and we’re going to try to work out an arrangement that they and the client can live with. That is our goal, so that they can pay our client.”
Despite the best wishes of Barrist, the world’s largest debt collection company generates thousands of consumer complaints about its practices each year and has paid settlements of $1.8 million to federal and state authorities.
But officials at NCO Group, based in the Philadelphia suburb of Horsham, Pa., insist that NCO takes pains to follow state and federal laws. Abuses by NCO collectors are the exception, not the rule, Barrist said.
“People have a perception of what and who the debt collector is,” Barrist said. “That’s not us.”
With unemployment and foreclosures rising, Americans now face more pressure from debt collectors, who must work harder to squeeze out payments in lean times, according to consumer advocates and industry experts. Consumers are increasingly complaining about debt collection practices to the Federal Trade Commission, and many of those complaints are levied against the industry giant, NCO, which employs 15,000 debt collectors worldwide and holds 600 million to 1 billion collection accounts at any time.
“We clearly understand that people don’t like being called by collection agencies,” Barrist said. “And we can’t make it a pleasant experience because nobody’s ever going to say, ‘Gee, I’m glad you called today.’ But we try very, very hard to make sure it’s done professionally.”
Since 2007, NCO has generated 7,964 consumer complaints to the FTC, nearly twice as many any other debt collection company.
Many of the complaints claim the company violated federal law by misrepresenting debt, repeatedly calling other people, and failing to send written notice, according to the FTC records.
Furthermore, the rate of complaints against NCO is rising faster than the collection industry as a whole. During 2009, all debt collection complaints to federal authorities are on track to increase 6 percent over 2007. In the same time period, complaints against NCO have risen 23 percent.
“I think we have the best record in the industry, statistically,” Barrist said, since the company handling the most accounts is likely to have the most complaints. “With that said, I take every one of these complaints seriously. I’m a big believer that regardless of whether NCO is at fault or not, the first thing we should be doing is saying we’re sorry and hearing what is going on.”
The FTC disciplined NCO in 2004 with a civil penalty for $1.5 million for misreporting consumer information to the credit reporting agencies, according to the FTC. Barrist blamed the blunder on another collection company, now-defunct Commercial Financial Services, which had worked the debts before NCO.
In 2006, Pennsylvania authorities settled with NCO after the company generated 800 complaints over a two-year period. NCO paid the state $300,000 and promised to follow the law. A spokesman for the FTC declined to say if it is taking any action against NCO, and a spokesman for the Pennsylvania’s attorney general office said it doesn’t have any pending cases against NCO.
Founded in 1926 as National Collection Office by Barrist’s grandfather, the company has grown explosively in the last two decades. In 1991, NCO had 63 employees, according to a company profile at the time. Now, it has 34,000 employees, about half of whom work in collections, according to Barrist.
Consumer advocates argue that the only way to get results in tough times is to be as aggressive as possible. Ira Rheingold, executive director of the National Association of Consumer Advocates, points out that NCO pays its collectors in part based on how much money they can recover.
“You’re going to see lots of bad behavior,” Rheingold said. “Institutionally, you have created a system that will encourage abusive behavior and harassment.”
Barrist disagrees. Outrageous tactics don’t work — and they hurt a collection company’s bottom line, he says.
“If you’re abusive to them on the phone, they’re not going to pay you,” he said. “All it does is start a whole chain of complaints and problems for the company.”
Original article here: Scripp News
If you or someone you know is feeling harassed by NCO, you do have rights. Please contact us or call us at 1-800-NOT-FAIR for free legal help.
