Just because you owe money doesn’t mean creditors can harass or threaten you. The Maine’s Fair Debt Collection Practices Act offers legal protection.
With the onset of the recession record numbers of people have been unable to pay their bills. Debt collectors are busier than ever making telephone calls, mailing collection notices and hiring lawyers, but they’re finding it harder than ever to make people pay. In many cases people simply do not have enough money. Debt collectors keep up the pressure anyway, and as they do, sometimes they step over the line from legal collection tactics to harassment, deception and abuse.
Maine’s Fair Debt Collection Practices Act (FDCPA) can be the consumer’s sword and a shield. It outlaws bombarding a person with dozens of calls a day. It outlaws calling a person at work, calling before 8:00 in the morning and after 9:00 at night, calling and hanging up over and over again, disclosing a person’s debts to other people and other forms of harassment.
The FDCPA forbids all forms of abuse including insulting language, obscene or indecent expressions as well as loud, angry, ranting speech. It forbids deceitful behavior such as using official looking letterhead to masquerade as law enforcement, and threatening actions which the debt collector could not ever do, like taking everything a person owns to satisfy a small debt.
The FDCPA puts powerful tools in the consumer’s hands. Even if the calls and letters are not harassing or abusive, the consumer can still make them stop. This is an important point. It is not just the abusive calls which can be stopped but also the polite and legal ones. A consumer can just shut them down by sending a letter. But there is a down-side to this power; a debt collector who cannot call any longer is free to take the next step, which could be a lawsuit.
To make calls stop a consumer who has an attorney can give the attorney’s name and telephone number to the debt collector. To call the consumer again after that point would be illegal. Most debt collectors will call the attorney to verify that that he or she was hired. If the consumer does not have an attorney, he can still stop the calls and letters by mailing the debt collector a letter instructing him to stop.
If the calls and letters do not stop or if they are harassing, abusive or otherwise illegal, the FDCPA gives the consumer potent weapons.
Residents of Maine can file a complaint with the Maine Bureau of Consumer Credit Protection. The Bureau can yank the debt collector’s license. All collection agencies, regardless of where they are from, must have a license to operate in Maine, and when a consumer endangers that license, he has considerable leverage.
There is a federal FDCPA, and it is very similar to the Maine law. It allows consumers to file complaints with the Federal Trade Commission.
The consumer can also hire a lawyer and sue. If he wins, the judge can award damages and order the debt collector to pay the consumer’s legal fees.
Other Useful Information about FDCPA
Collection Calls at Work - If you are getting calls at work, you can make the calls stop by telling the collector in writing to stop, but this is true only if your employer does not allow personal calls.
Calling at Inconvenient Times - The FDCPA forbids calling before 8:00 in the morning and after 9:00 at night. But this is not to say that he can call at noon to wake up a person who works at night. The night shift worker who gets such a call must tell the collector why it is that daytime calls are inconvenient, instruct him to stop calling and then follow it up with a letter saying the same thing. It is easy to see why such calls would be harassing.
Consumer vs. Business Debt - The FDCPA applies only to consumer debts. They are debts primarily for personal, family or household purposes.
Collection Agencies Only - The FDCPA does not apply to lenders like banks, credit unions or credit card companies that are trying to collect debts owed to them. But if the calls or letters are from a collection agency trying to collect a debt owed to another company, like a bank or a hospital, the FDCPA is there to protect consumers. This is not to say that a bank calling about its own loan is free to abuse customers. It is not, but it is far more difficult to take action against such a bank.
Debt Buying Companies - There is a thriving industry out there which buys bad debts from banks, credit card companies and others. They pay pennies on the dollar, then pursue the borrowers and try to collect the full amount of the debts. Debt buyers are collecting debts which they own, like the bank they bought them from, but they are still subject to the FDCPA. This is so because the debt buyers do nothing but collect; they do not lend, they do not invest, they only collect, so they must obey the FDCPA.
Location Information - Debt collectors are permitted to contact other people provided that the purpose is to find the person who owes the debt. The debt collector may not ask for anything other than the borrower’s home address, home telephone and work telephone numbers. This is called “location information”. The collector may not disclose that he is trying to collect a debt. To do so would be a violation of the FDCPA.
“Miranda Warnings” - The first collection call and the first collection letter must contain the statement, “This is an attempt to collect a debt and any information obtained will be used for that purpose.” Every subsequent call and letter must state that it is from a debt collector. To leave out either is a violation of the FDCPA, and is another stick with which to crack the collector on the knuckles.
Validation of Debts - The collector must inform the borrower that he has the right to dispute the debt and to demand verification of it. If the borrower believes the debt was paid or has other reason to believe he does not owe it, then within thirty days he must write to the collector and ask for verification. Collection activity must stop until the collector responds. If the collector cannot verify it, it would be foolish to pay him.
Related Legal Terms
Debt collector: means any person whose principal purpose is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.
Harassment or abuse: any conduct, the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of a debt. Some examples are:
- The use or threat of use of violence or other criminal means to physically harm the person, reputation or property of any person;
- The use of obscene or profane language, or language the natural consequence of which is to abuse the hearer or reader;
- The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency
- The advertisement for sale of any debt to coerce payment of the debt;
- Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse or harass any person at the called number; and
- The placement of telephone calls without disclosure of the caller's identity.
- Contacting the borrower by postcard.
Verification of the Debt: means any document or record which proves who owes how much to whom. This could include a loan application, a credit card agreement or a print-out of account information showing loans, fees, interest and payments.
Postdated Check: a check that is dated at some future date. Often a debt collector will request a postdated check on the understanding that he will wait to deposit it until the consumer gets some money. Under the FDCPA it is illegal for the collector to make the consumer postdate it by more than five days. It is also illegal to make the consumer write a postdated check for the purpose of later threatening him or her with criminal charges if the check turns out to be no good.
Maine Bureau of Consumer Credit Protection: a division of the Department of Professional and Financial Regulation. It oversees many aspects of the consumer finance industry, including debt collectors, loan brokers, mortgage companies and credit reporting agencies. It protects consumers by responding to consumer complaints and issuing licenses. For contact information go to www.maine.gov.
The FDCPA is a terrific legal tool for consumers, and there is much a consumer can do on his own to respond to unwanted collections activity. However the advice of an experienced attorney can be very useful in cases where the consumer is considering legal action. In a successful lawsuit the judge can make the collection company pay the consumer's legal fees.
