If you have been following our blog, you are familiar with the financial hangover that occurs in January when people confront the charges they racked up in making holiday purchases. This monetary reckoning happens in households in every income bracket, and the financial pinch is felt severely in many families. Some folks are able to reduce expenses and repay debt by limiting unnecessary purchases. For others, there is no fat in the budget to trim.
The strategy employed by those living on the edge of their means is to cross fingers and skip credit card payments. A surplus in the banking account may materialize but so does the attention of creditors. Calls at the middle of the night and excessive mailings begin to accumulate alongside the bills. For folks who are not yet ready to commit to filing for bankruptcy, the amount of the debt owed may seem disproportionate to the creditor response.
Aware of the aggressive tactics employed by debt collectors, federal legislators passed the Fair Debt Collection Practices Act (FDCPA). This law was designed to prevent collection agencies from tricking or harassing people who have fallen behind in paying their bills. While this statute does not erase the debt owed, those tasked with enforcing it use the FDCPA to hold agencies accountable for their actions.
These are some of the practices banned under the FDCPA:
1. Creditors may not make untrue statements about themselves.
The FDCPA prohibits creditors from misrepresenting themselves. This means that they may not claim to be acting on behalf of the government or a law firm, unless they are employed by these entities. They are forbidden from claiming they represent credit reporting agencies.
2. Collection agencies may not spread false information about debtors.
This means they cannot publish false reports manufacturing a debtor's criminal history. True details, such as the sum owed and the name of the debtor, are also forbidden from sharing with the public. They may not contact the employers of the debtor about the funds owed.
3. Creditors may not exaggerate the consequences associated with amassing debt.
They are not allowed to threaten that debtors will be arrested should they not pay what is owed. They cannot claim they are entitled to dock debtor's paychecks and repossess property unless they are entitled to do so by the law.
There are many other protections extended through the FDCPA. Individuals who are struggling with harassing creditors are advised to review the guidelines of this act. Seeking the counsel of a knowledgeable attorney can also help those in debt develop a strategy for handling harassment.