What are your rights under the federal and Michigan collection laws?
Debt Collectors are regulated by both Federal and state collection laws. Debt collectors are legally prohibited from doing many things, including threatening or harassing you, contacting you at inconvenient times or places, telling others about your debt, continuing to contact you if you have requested that they stop (in writing), and many other unfair and abusive practices.
Under the FDCPA (Fair Debt Collection Practices Act), you have the right to sue a debt collector who violates the law, in a state or federal court within one year from the date of the violation. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney’s fees also can also be paid for by the collector.
We have filed numerous lawsuits under the FDCPA and recovered thousands of dollars for our clients and it has not cost them a dime to do so. Sometimes, we have even had the debt satisfied as part of the settlement.
Who is a “debt collector” and what debts are covered?
Under the FDCPA, a debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis. Only personal, family, and household debts are covered under the FDCPA. This includes money owed for the purchase of an automobile, for medical care, or for credit card accounts.
Can you stop a debt collector from contacting you?
A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts. You can stop a debt collector from contacting you by writing a “cease and desist” letter to the collector telling them to stop. Note that simply telling a collector to stop calling you is insufficient to invoke your right to stop the collector from contacting you. You may stop a collector from contacting you only by doing so in writing.
A debt collector may contact your spouse, your attorney, the creditor or the credit reporting agency in connection with your debt.
A debt collector may contact your spouse, your attorney, the creditor or the credit reporting agency in connection with your debt. If the bill collector contacts anyone else, then he has violated the FDCPA and most likely, the Michigan Collection practices Act. Indeed, you put the collector on notice that you are represented by an attorney, then the collector must contact the attorney, rather than you.
What must the debt collector tell you about the debt?
Within five days after you are first contacted by the debt collector, he must send you a Validation Notice. This letter is supposed to tell you:
- the amount of the debt;
- the name of the creditor to whom the debt is owed;
- a statement that unless you, within thirty days after receipt of the notice, dispute the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
- a statement that if you notify the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against you and a copy of such verification or judgment will be mailed to you by the debt collector; and
- a statement that, upon your written request within the thirty-day period, the debt collector will provide you with the name and address of the original creditor, if different from the current creditor (this is helpful to you when dealing with debt purchasers such as Asset Acceptance or NCO).
May a debt collector continue to contact you if you believe you do not owe money?
A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if it sends you proof of the debt, such as a copy of a bill for the amount owed. Many times, debt collectors will send very little information in response to a consumer’s demand for validation of the debt and continue to pursue its collection actions.
What types of debt collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
- use threats of violence or harm;
- publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
- use obscene or profane language; or
- repeatedly use the phone to annoy someone
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
- falsely claim that they are attorneys or government representatives;
- falsely claim that you have committed a crime;
- falsely represent that they operate or work for a credit reporting company;
- misrepresent the amount you owe;
- indicate that papers they send you are legal forms if they aren’t; or
- indicate that papers they send to you aren’t legal forms if they are.
Debt collectors also are prohibited from saying that:
- you will be arrested if you don’t pay your debt;
- they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
- legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.
Debt collectors may not:
- try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
- deposit a post-dated check early;
- take or threaten to take your property unless it can be done legally; or
- contact you by postcard.