Violations of Debt Collection Laws

Dallas, TXWhen debt collection agencies break the law, they sometimes do it in horrifying fashion, leaving those people they have come in contact with scared and unsure of what to do. Laws such as the Fair Debt Collection Practices Act are designed to protect consumers from unethical, aggressive or threatening tactics from debt collectors, but often consumers do not know what steps they can take - including filing a lawsuit - to protect themselves.

The Federal Trade Commission is one of the agencies charged with enforcing the Fair Debt Collection Practices Act, along with the Consumer Financial Protection Bureau. The Consumer Financial Protection Bureau is required to submit an annual report about the Fair Debt Collection Practices Act to Congress, with information from the Federal Trade Commission.

According to a news release from the Federal Trade Commission regarding a years’ worth of investigations into unethical debt collections practices, debt collectors were accused of using deceptive or abusive tactics to intimidate consumers, and either collecting on non-existent debts or on debts not owed to those collectors.

Among the threatening or deceptive tactics were threatening bodily harm to the consumers, desecration of family members who had died and death to pets. Other tactics included threatening to garnish wages, masking identities, threatening imprisonment, charging unauthorized late fees and charging inflated fees. In the so-called “phantom debt” cases, collectors were accused of defrauding consumers, collecting money that was not actually owed, collecting that was not applied to the consumers’ debts and collecting on debt that was so old it was no longer legally collectable.

In January, the Federal Trade Commission announced that at the Commission’s request a district court shut down a debt collection agency that had told a woman she would go to jail for three years and forfeit her disability payments if she did not pay $980 in debt. In other cases, the debt collector allegedly told consumers their children would be put in government custody and claimed they worked with local sheriff's offices.

Other offences allegedly committed by the collection agency included using obscene language and calling outside the allowed hours.

Consumers can file complaints about unethical or threatening debt collections practices. They can also file a lawsuit against the debt collection agency.