Consumers Abused By Debt Collectors
The debt collection industry is a multi-billion dollar swamp that relies on aggressive and often illegal tactics to collect money from consumers. Debt collectors are known to use threats, intimidation, and false statements to get consumers to pay up. It’s adds up to consumers being abused by debt collectors.
When consumers don’t pay, debt collectors may resort to illegal debt collection tactics.
The Federal Trade Commission (FTC) is the nation’s consumer protection agency and enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from consumers.
As the primary regulator of debt collectors, the federal agency has taken action against many debt collection companies for using illegal debt collection tactics that abuse consumers. Debt collection violations are one of the most common types of complaints the FTC receives.
A Case Of Clear Consumer Abuse
In a high profile case against a major debt collection company, the FTC negotiated a settlement with Vantage Point, permanently banning Vantage Point and its executives from the debt collection business. The settlement also prohibited these defendants from ever misrepresenting material facts about financial-related products and services, profiting from customers’ personal information collected as part of the challenged practices, and failing to dispose of such information properly.
The FTC and the State of New York sued Vantage Point in 2015, alleging that the debt collection company used threats and abusive language, including false threats that consumers would be arrested, to collect supposed debts from thousands of consumers.
In their complaint against Vantage Point, the FTC and New York alleged that the company often falsely claimed to be a law firm, process server, or even affiliated with the government when talking to consumers. In some instances, they posed as agents and attorneys, and in other cases, they falsely claimed they were working as an intermediary with the state, or that the state had placed the consumers’ account with them to give them a chance to pay the debt before criminal charges were filed.
The defendants, using these deceptions, falsely claimed that consumers had committed a crime and that an arrest warrant would be issued unless they made a payment. Often, the defendants told consumers that they would spend months in jail or would need to pay thousands of dollars in bail if they didn’t pay. In some cases, the defendants falsely told third parties, including consumers’ friends and employers, that the consumers had committed a crime and that a warrant had been issued for their arrest.
More than $255,000 will be paid out in reimbursement by the FTC as a result of Vantage Point Services’ unlawful debt collection activities. The agency’s action against Vantage Point is part of its ongoing efforts to protect consumers from illegal debt collection practices. The FTC has obtained over $483 million in refunds from litigation filed against many debt collectors for using illegal debt collection tactics.
In 2021, however, the U.S. Supreme Court ruled that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The money being returned to consumers comes from settlements that were entered before the Supreme Court’s decision.
Protecting Consumers From Illegal Debt Collection
The Commission has urged Congress to restore the Commission’s ability to get money back on behalf of consumers.
Consumer protection advocate Andy Spears has written extensively on issues related to FTC and CFPB actions against debt collectors. He says restoring the ability to make consumers whole by way of refunds is critical. “These shady debt collectors should pay for their wrongdoing. And the money collected should go to the consumers who faced harassment and intimidation at the hands of these bad actors.”
With such a high amount of consumer debt at stake, and debt collectors behaving badly, the FTC must continue to pursue these companies. They must also have all of the tools at their disposal to make debt collectors pay for their illegal practices, and that includes the ability to seek monetary relief in federal court. The #FTC has the authority to obtain financial restitution on behalf of consumers under other sections of the FTC Act, namely, Sections 5 and 19.
Protecting Yourself From Illegal Debt Collection
The best way to protect yourself from illegal debt collection tactics is to know your rights. The FTC has published information on its website about your rights under the Fair Debt Collection Practices Act. You can also find information on debt collection scams and how to avoid them.
If you are being harassed by a debt collector, you may be able to take direct action against them. The FTC has a complaint process where you can file a complaint against a debt collector for illegal debt collection practices. You can also contact your state attorney general’s office or the Consumer Financial Protection Bureau if you think you have been a victim of illegal debt collection practices.
You should also keep in mind that debt collectors may not contact you at work if you tell them not to. They also may not contact you outside of the hours of 8 a.m. to 9 p.m. These are just a few of the restrictions placed on debt collectors by the Fair Debt Collection Practices Act.
If you are being harassed by a debt collector or if you think you have been a victim of illegal debt collection practices, contact a consumer protection attorney.
The article is for informational purposes and is not to be considered legal advice or a substitute for consulting an attorney. If you have any questions about illegal debt collection, please feel free to contact our law firm.
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