Sunday, April 19, 2009

Fair Debt Collection Practices

I have been browsing some sites about debt management (well, for one of my clients as well as to gather data for my debt management blog) when I came across the Fair Debt Collection Practices Act here which, I believe, is eing enforced right now in the US and UK.

For those who do not like to click the link, here's what's stated in that act:

• Calling the client’s place of employment after the debt collector knows the client’s employer prohibits calls or the client asks the debt collector not to call at work anymore.

• Threatening that nonpayment will result in imprisonment, garnishment, and/or liens.

• Disclosing to third parties that debts are owed.

• Contacting any third party more than once, unless requested to do so by the third party.

• Contacting a third party when the debt collector already knows how to contact the client.

• Threatening to do anything the debt collector isn’t allowed to do (If you don’t pay, we are going to……Call parents, boss, sheriff, etc.).

• Contacting any person (other than the attorney) after knowing the client is represented by an attorney.

• Failing to identify themselves to the client or to third persons (or misrepresenting their identity).

• Contacting the client after receiving a cease and desist letter.

• Harassing, oppressing, insulting or verbally abusing the client (it’s a matter of degree).

• Threatening force or criminal means to harm the client or their property.

• Using profane language.

• Calling repeatedly on the same day (example = 10 times a day).

• Implying debt collector is an attorney when it is not.

• Threatening to sue when the debt collector is not an attorney/law firm.

• Threatening to take any action debt collector doesn't intend to take or otherwise lying or making misrepresentations.

Now, why am I posting it here? Because I know that I'm sure that, at one point in your life, you have experienced or have come across someone who has been harrassed by these collection agencies. Being an HR practitioner for almost 10 years now, I have seen how most of my officemates get harrassed by these collection agencies.

For those who have lawyer friends, if you received a demand letter, one way of dealing with this is by sending a Validation Request (as advised in this post). Make sure your lawyer make and sign the VALIDATION REQUEST letter:

Lawyers address:
Address of collection agency:
Re: Acct: 012345678

To Whom It May Concern:

This letter is being sent to you in response to a demand letter sent to me on 02 August 2005 that your claim is disputed and validation is requested. This is NOT a request for “verification” or proof of my mailing address, but a request for VALIDATION.

I respectfully request that your offices provide me with competent evidence that * (your name) have any legal obligation to pay you. Please provide me with the following:

• What the money you say (your name) owe is for;
• Explain and show me how you calculated what you say (your name) owe;
• Provide me with copies of any papers that show (your name) agreed to pay what you say I owe;
• Provide a verification or copy of any judgment on (your name)
• Proof that you are authorized to collect by your __________________.
* Proof that your client referred my account to you for collection.
• Proof of billings submitted to you by _______.
• Show me that you are licensed to collect.
• Provide me with your SEC license numbers and Registered Agent.

If your offices are able to provide the proper documentation as requested in the following Declaration, I will require at least 45 days to investigate this information and during such time all collection activity must cease and desist.

If your offices fail to respond to this validation request within 7 days from the date of your receipt, all references to this account must be deleted and collection notices completely stop.

I would also like to request, in writing, that no telephone contact be made by your offices to my client's home or to his/her place of employment. If your offices attempt telephone communication with (your name), including but not limited to computer generated calls and calls or correspondence sent to or with any third parties, it will be considered harassment and I will have no choice but to file suit and report such harassment to the National Bureau of Investigation or other Law Enforcement Body.

All future communications with me MUST be done in writing and sent to me (name of lawyer)It would be advisable that you assure that your records are in order before I am forced to take legal action.


Name of Lawyer

If you need more advice, here's also a good read.

If these collection agencies are harrasing you, you can always get their names and report them to BSP. Do not let them scare you. Remember, the most that they can do is file a civil case, not a criminal case. If the collection agency threatens you with RA 8484, do not get stressed out about it. RA 8484 is more of an identity fraud solution. You would only be answerable to it if you use your credit card with malicious intent (read: no intention of paying).

Senator Mirriam Santiago has already filed the FAIR DEBT COLLECTION PRACTICES ACT. There's no update yet about this but at least someone has made a move.

Buy Me A Mocca Frappucino

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