Consumer Debt and Consumer Credit

Around one-third of Americans have debts in collection. For too many of these Americans, harassment by debt collectors is a fact of life. But it doesn’t have to be this way. In 1978, Congress passed the Fair Debt Collection Practices Act (FDCPA) to protect consumers and regulate the debt collection industry. Most state legislatures followed suit by enacting fair debt collection laws that protect people who owe money and outlaw abusive debt collection practices. In addition to federal law, California passed the Rosenthal Fair Debt Collection Practices Act, which applies most of the protections available under the FDCPA to a much broader definition of “debt collectors.” Under these laws, debt collectors are prohibited from making false, deceptive, or misleading statements, or using illegal means to try to collect on a consumer debt. If a debt collector has violated these laws by engaging in illegal, abusive, harassing, or deceitful conduct, Preston Law Offices can help.

What Are Debt Collection Violations?

Debt collection violations occurs when debt collectors use abusive tactics to try to collect on a debt. Examples of illegal conduct by debt collectors include:
  • Making false, misleading, or deceptive statements
  • Misrepresenting the amount of the debt
  • Failing to report a disputed debt as disputed
  • Improperly sharing information about the debt with your employer or friends
  • Contacting you without identifying who is calling and that they are trying to collect on a debt
  • Making repetitive and harassing phone calls or calling after hours
  • Telling or threatening to tell other people (your employer, neighbors, credit references, or friends) that you owe a debt
  • Accepting a postdated check and cashing it before its date
  • Stating that you must make immediate payment to avoid being sued
  • Using false names or pretending to be an attorney, police officer, investigator, or similar official
  • Making false threats of arrest, imprisonment, or prosecution for a crime
  • Failing to inform you of your rights
  • Attempting to collect debts that are no longer legally enforceable
  • Contacting you at work if they know your employer does not permit it
  • Contacting you before 8 a.m. or after 9 p.m.
  • Sending an initial debt collection letter without including legally required disclosures
  • Threatening violence or harm to you, your reputation, or your property
  • Using vulgar or obscene language, calling you names, yelling at, or berating you

Debt Buyers and Old Debt

One reason you might hear from a debt collector about a consumer debt you forgot years ago is that someone purchased a bunch of consumer debts (at a steep discount) and now hopes to get a return on their investment. California law puts special restrictions on such debt buyers. The Fair Debt Buying Practices Act requires debt buyers to provide a chain of title (to prove that they are the debt’s only owners) if you ask for it in writing. This stops collection of debts which have been sold multiple times to different debt buyers. Debt collectors are not supposed to sue (or even threaten to sue) on time-barred debt (debt where the applicable statute of limitations has expired).

Credit Applications

Credit and debt are two sides of the same coin. People with debts often need credit, and they can pay a higher price for that credit because of their debts. The Equal Credit Opportunity Act (ECOA) prohibits discrimination on the basis of
  • race, color, religion, national origin, sex or marital status, or age;
  • use of public assistance; and
  • in retaliation for exercising your rights.
ECOA also provides consumer critical credit information: if you are denied credit, or your credit is revoked, reduced, or refused, the creditor has to tell you why.

Credit Reports

Debts listed on your credit report can impair your access to credit, cause personal embarrassment, or even cost you a job. The Fair Credit Reporting Act (FCRA) specifies what can–and can’t–be included in your credit report. It also requires that, when creditors deny a credit application because of the applicant’s credit report, they identify the credit reporting agency that issued the report and how to contact it. The FCRA gives you the right to access your credit report and anything else in your credit file from the credit reporting agencies. Consumers should regularly check their credit reports if they are concerned that a disputed debt is included in their credit report. When you dispute a debt with a debt collector, it must report that dispute to the credit reporting agencies. If a debt collector continues to report a disputed debt, you can submit your dispute directly to the credit reporting agency, which requires both the credit reporting agency and the debt collector to investigate your dispute. Even if the dispute does not remove the debt from your credit report, you can still add a statement explaining the dispute in your credit report.

California Law and Credit Reporting

California’s Consumer Credit Reporting Agencies Act (CCRAA) provides consumers with rights and remedies in addition to those found under the FDCPA or FCRA, including the right to sue if a debt collector provides information to a credit reporting agency that it knows or should know is incomplete or inaccurate.

Preston Law Offices Stops Abusive Debt Collection Practices

If you think a debt collector is abusing, harassing, or lying to you, Preston Law Offices can help. We stand up to debt collectors who violate the law. Understanding fair debt collection laws, credit reporting statutes, and the relationship between them is complicated, and many consumers do not know when their rights have been violated. Contact us today to schedule a free, confidential consultation to discuss your situation and how we can help.