By the Collections Agitator
The Fair Debt Collection Practices Act (FDCPA)- helps keep you sane if you are experiencing excessive calls, harassment, and possible deceptive actions by third-party debt collectors.
The other day, when talking with a friend “Kim”, her phone must have beeped at least four-separate times during our conversation. I finally said, hey, it looks like someone really needs to get a hold of you. She replied, no, it’s just a debt collector calling. I asked how long and often does this happen? I was surprised when she said about two months. It started when she changed her cellphone number.
Being a friend, I suggested (without judgment, change of tone, or side-eye) that she try to resolve the issue. That’s when I learned it was not even her debt; the calls are for someone else, even though she’s repeatedly told them it’s the wrong number and the wrong person. She’d explained this was a new cellphone number thinking that would end the calls. It did not. They then told her to find the person who previously had the number and have them call the debt collector. They basically called her a liar and tried to get her to do their job of locating this “obligated person.” I could not believe what I was hearing.
I replied, you know that’s not permissible -right? She did not. It was not surprising as most U.S. residents are in the dark about their consumer rights and the limitations on third-party debt collection business practices. The FDCPA prohibits the very things she is experiencing.
Congress passed The Fair Debt Collection Practices Act (1977 (15 U. S. C. §1692)) to address the aggressive, deceptive, and harassing activities of some debt collectors in their attempts to collect unpaid or defaulted consumer debt. A Consumer is a human being. Consumer debt is an obligation the consumer assumes with the intent that the service and goods or property are for the use and benefit of themselves, their family, or their household. The FDCPA does not apply to business debt.
There is a ripple in the force.
Under the Act – debt collectors include collection agencies, debt buyers, and lawyers who regularly collect debt as the primary or a significant portion of their business. They are also individuals or companies that use interstate commerce instrumentalities (think phone, mail, etc.) to collect others debt. A debt buyer is an individual or entity that purchases defaulted debt. The debt buyer then can attempt to collect the debt or engage a debt collector to collect the defaulted debt. For a long time, there was an argument that debt buyers were separate and apart debt collectors, and there was a lot of contention about whether the FDCPA applied. In McAdory v M.N.S. Associates, LLC. and, DNF Associates, LLC. decided earlier this year, the U.S. Court of Appeals for the 9th Circuit ruled it does. That judgment aligns with the 2019 3rd Circuit holding in Barbato v Greystone Alliance LLC.
A third-party debt collector is an entity other than the original creditor. For example- a defaulted debt is owed to Alexander’s, who sells or transfers the debt to another. Generally, at this point, Alexander’s is no longer seeking to recover from you—but the new/subsequent debt holder can and probably will. However, if Alexander’s attempting to collect its debt via another division or branch, it is not bound by the Act because they are the original creditor. It is an in-house collection. If the debt is transferred or sold before default, then the FDCPA does not apply because the debt holder is deemed a creditor rather than a debt collector.
Tribe, I can imagine that one or more of you know someone or may have been on the receiving end of such a call in the past or are experiencing it right now. No shame, or judgment, whether the debt is yours or not- the debt collector’s actions above may violate the federal statute put in place to discourage, limit, and prevent consumer harassment and overly aggressive collection attempts.
Over the coming weeks, we will discuss the FDCPA, including some of the consumer protections therein, the actions “Kim” and others took, and steps you may consider to address consumer debt collector activities and maybe, even turn the tables and collect from them. Information is power, and we are WOKE and empowered!
Tribe, the names of individuals, businesses, and events are fictional to illustrate how one might encounter debt collectors. You can read the linked cases for more information.