Creditor Harassment

Debt collection harassment occurs when a debt collector harasses, oppresses, or abuses a debtor. Debt collection laws prohibit debt collectors from harassing debtors. These laws are enforced by government agencies. 

While creditors are entitled to repayment of loans, they cannot use improper, harassing or deceptive methods in their attempts collect debt, regardless of how much is owed.  The Fair Debt Collection Practices Act (FDCPA) protects borrowers from improper collection practices and provides individuals harmed by debt collectors' illegal actions with robust remedies.

What Can I Do If a Debt Collector Harasses Me?

If an individual is being harassed by a debt collector, they should keep records of any and all phone calls, including the date and time of the calls as well as their content. In addition, any mail, emails, or text messages from a debt collector should also be kept as records.

• Keep a written record of contact
• Request verification that the debt collector and the debt are legitimate
• Verify the amount alleged as owed and the original creditor
• Request the caller stop making harassing calls
• Follow-up all requests in writing sent via certified mail return receipt

If an individual is being harassed by a debt collector, they should instruct the debt collector to cease the harassing calls. They should also send a letter in writing to the collection company requesting the harassment to stop. If an individual is being harassed by a debt collector, they have three options to resolve the harassment issue. They can:

• Submit a complaint to the Consumer Finance Protection Bureau (CFPB);
• Contact the attorney general for the state where the individual resides; or
• File a lawsuit under the FDCPA against the debt collector in civil court.

What is the Difference Between a Debt Collector and a Telemarketing Scam?

Telemarketing scams have been used in an attempt to separate individuals from their money or possessions for years. Many times, rumors of the new scam will circulate, such as the Internal Revenue Service (IRS) threatening to arrest individuals if they do not pay back taxes they owe. 

There are some ways to differentiate between a telemarketing scam and a debt collector. A telemarketing scam usually begins with a robotic call, but some may be calls from a live individual. They will likely refuse to tell an individual:

• About the debt the individual has;
• How much debt the individual owes;
• What the debt relates to; or
• Who is the party responsible for the debt.

If the individual who calls is unable to give any information regarding why the debt is owed, they are not a debt collector. An individual should make sure to document the name of the individual or the company that is harassing them, especially if they are not sure whether it is a debt collector or a scammer.

Know Your Rights Under the Law and Turn the Tables on Debt Collectors

Debt collectors must follow strict guidelines set forth by the FDCPA when contacting borrowers.

1. Prohibition against Harassment

The law prohibits debt collectors from harassing, oppressing, or otherwise abusing a debtor or anyone else they contact when attempting to collect a debt. Prohibited actions directed at the debtor include:

• Using or threatening to use physical violence
• Performing or threatening to perform illegal actions to damage debtor's reputation or property
• Use of obscene or profane language
• Making repeated phone calls to annoy, abuse, or harass anyone answering the phone
• Publishing or threatening to publish the debtor's name on lists of debtors(This does not include reporting information to a credit reporting agency).
• Advertising to sell the debt in an effort to coerce payment
• Threatening to take action that the creditor does not intend to do, such as a threatening a lawsuit without intending to sue
• Calling debtors without properly disclosing their identity

2. Prohibition against making False, Deceptive or Misleading Statements

In addition to harassment, debt collectors are also forbidden from making any false, deceptive, or misleading statements as they attempt to collect debt or to obtain information about the consumer. Examples of such behavior include:

• Claiming to be a law enforcement agency or otherwise associated with a government agency
• Falsely representing the character or amount of the debt
• Falsely claiming to be an attorney or a credit reporting agency
• Threatening the debtor with arrest or imprisonment, suggesting that failure to pay a debt is a crime.
• Threatening to seize debtor's property or garnish wages
  (unless such action is legal and actually intended)
• Threatening to report false information to credit reporting agencies
• Furnishing documents resembling those of a government agency or court
• Using a false business name
• Attempting to collect fees, fines, or interest that are illegal or not part of the agreement with the creditor
• Failing to disclose status as a debt collector.
• Failing to disclose that any information obtained from the debtor will be used for the purpose of debt collection (except if the communication is a formal pleading made in connection with a legal action).

3. Other Communication Restrictions on Debt Collectors

Debt collectors have to follow additional rules when contacting a debtor. Some prohibitions on debt collectors' actions include:

• Making calls at inconvenient times, especially before 8.a.m. or after 9 p.m.
• Contacting debtor if the collector knows the debtor has retained an attorney
• Contacting debtor's workplace if employer prohibits such communications
• Contacting, or threatening to contact, third parties such as relatives, neighbors, employers without express permission (except consumer reporting agencies and attorneys)
• Contacting the debtor after the debt collector has been notified in writing to cease communication (unless to inform the debtor that collection efforts are being terminated, or to inform debtor of certain actions that the collector intends to perform to which it is entitled under law)
• When communicating through mail, using a postcard or placing information on the envelope that visibly indicates that the source is a debt collector

What Happens if I File a Lawsuit?

The victim of the harassment, or plaintiff in a lawsuit, will need to prove the debt collector violated an aspect of the FDCPA. The case proceeds like a civil trial. If the plaintiff prevails, the debt collector or debt collection company may be required to pay the plaintiff's attorney's fees or monetary damages.

What is the Fair Credit Reporting Act?

The Fair Credit Reporting Act (FCRA) is a federal debt collection law that protects how an individual's credit information is shared with third parties. It provides instructions on how debt collections must be reported to the three credit bureaus. 

For example, a debt collector may violate the FCRA if they report information to the credit bureaus regarding a debtor that is false. This may include instances such as reporting a debtor is seven months behind on payments when they are actually only three months behind.

An individual's credit history is accessed regularly by individuals or companies, such as:

• Lenders;
• Employers;
• Landlords;
• Utility companies; or
• Retailers. 

The FCRA provides individuals with several important rights, including:

• An individual's right to see their own credit report;
• An individual's right to know when and by whom their credit report has been accessed;
• An individual's right to dispute inaccurate information on their report; and
• The right to know when an individual's credit report has been used negatively against them.

There are three main nationally recognized credit bureaus:

• Equifax;
• Experian; and
• TransUnion.

Pursuant to the FCRA, these credit bureaus are required to:

• Provide a copy of an individual's credit report upon their request;
• Investigate on an individual's behalf information that they dispute;
• Limit access to an individual's file; and
• Allow an individual to opt-out of prescreened credit offers.

Additionally, there are companies that collect and provide credit history information to the credit bureaus. These information collection companies are required to, among other things:

• Update any and all inaccurate information provided to any credit bureau;
• Disclose any negative information reported about an individual; and
• Have identity theft reporting and prevention procedures in place.

What are the Penalties for Violating the FCRA?

If an individual receives a copy of their credit report for any reason other than a legitimate business purpose or without an individual's permission, the requesting party may be in violation of the FCRA. The FCRA provides that an individual may sue for damages for willful or negligent disclosure of their credit information. The aggrieved party may be able to sue for:

• Actual damages up to $1,000; 
• Reasonable costs or attorney's fees; or 
• Punitive damages if permitted by the court.

Even More Protections for Debtors in New York State

The New York State Department of Financial Services has particular regulations requiring debt collectors to provide additional disclosures to consumers. The regulations are designed to protect consumers beyond the requirements of the FDCPA.

The regulations require debt collectors to provide initial disclosures when they initially contact a debtor. Within 5 days of the initial communication, the debt collector must provide the debtor with “clear and conspicuous written notification” that debt collectors are prohibited from engaging in “abusive, deceptive, and unfair debt collection efforts” under the FDCPA.

Debt collectors must also provide a written notice stating that if a creditor or debt collector receives a money judgment against the debtor in court, state and federal laws may prevent certain types of income from being seized to pay the debt such as Social Security, public assistance, unemployment and disability benefits, pensions, and veterans' benefits.

In situations where the alleged debt has been “charged off,”(declared unlikely to be collected) debt collectors have to provide debtors with a written notice within 5 days of the initial communication with the debtor stating the following: the name of the original creditor, an itemized accounting of the charged-off debt, any amounts paid on the debt since the charge-off, and the total interest, charges and fees.

New York State regulations also provide debtors with additional protections such as the right to request “substantiation” of any charged-off debt at any time during the collections process.

The regulations also require debt collectors to notify debtors of their right to dispute the debt, and whether the statute of limitations has expired. The regulations also include procedures for documenting any agreement between the consumer and the debt collector to satisfy or otherwise settle the debt.

What is in an Individual's Credit Report?

A credit report provides information about an individual's current and historical credit activities. All three nationwide credit bureaus discussed above have information regarding an individual's credit activities.

Specifically, credit reports will contain an individual's personal information, including:

• Name and nicknames;
• Social security number;
• Current and former addresses;
• Birth date;
• Phone numbers;
• Any current credit accounts; and
• Any past credit accounts.

For example, if an individual has a current mortgage and a past car loan, their credit report will show both the mortgage and the car loan. It will including information such as:

• The amount of the loan;
• Any account balances;
• Payment history;
• The creditor name; and
• Whether the account is currently open or closed.

Using this information, the credit bureaus generate a credit score. This score can help determine whether or not an individual is a good credit risk and influence interest rates on loans for which an individual applies. It is important to note that credit scores may vary by credit bureau, so it is important to check each one.

Should I Talk to an Attorney about Debt Collector Harassment Laws?

Yes. If you are having issues with debt collection harassment, it is essential to speak to a local collection defense lawyer. Debt collection agencies often violate both the FDCPA and the FCRA on a regular basis. You may be the victim of deceptive or abusive practices by debt collectors. 

If you have any questions or concerns, document the communications and contact an attorney immediately. An attorney can review your case, determine if a violation has occurred, and represent you during any court proceedings, if necessary.