In the world of debt collection, there are a few simple rules to abide by: No harassing debtors, no deceptive practices, and no exposing an individual’s private debt. There are more rules of course, but when debt collectors break any rules, they’re going to have to deal with the FTC.
Recently, the FTC settled with a debt collection agency that pretended to be lawyers and threatened to sue debtors. Customers were also harassed via text messages and sent notices in envelopes printed with images of a person being “shaken down”. All of this is illegal and misleading.
Let’s see why the FTC threw the book at this debt collection agency and remind ourselves of our rights as debtors.
Debt Collectors Falsely Pose as Lawyers
The FTC recently settled with National Attorney Collection Services for violation of several rules. To start, debtors received harassing text messages that gave off the impression that National Collection Services were a group of lawyers. National Attorney Collection Services? It sounds like a group of lawyers.
While sending texts to debtors isn’t necessarily illegal, fooling them into believing that you’re a law firm is illegal
Here’s the FTC’s quick breakdown:
For example, it’s against the law for debt collectors to pretend to be attorneys or falsely threaten to sue you, regardless of how they communicate — through texts, through letters, or through phone calls.
In short, National Attorney Collection Services was flagged for lying to consumers. It’s unlawful to not disclose that you’re a debt collector.
However, this isn’t the only thing that landed them in hot water.
Debt Collectors Break the Rules, Pay the Price
Misleading consumers isn’t enough to land you with a $1 million civil suit. National Attorney Collection Services broke several other rules while using tactics to get consumers to pay debts. The company falsely threatened to sue consumers, which is a huge violation.
They also sent collection notices in envelopes with a graphic of a person being “shaken down”. Why can’t they do this? It essentially exposes someone’s private debt. Mailed envelopes can only include the name and address of the company. It can’t indicate that the consumer owes a debt. Envelopes like this jeopardize a person’s job or reputation.
Jessica Rich, dirrector of the FTC’s Bureau of Consumer Protection, spoke out in a public statement: “No matter how debt collectors communicate with consumers — by mail, by phone, by text or some other way — they have to follow the law.”
In the end, National Attorney Collection Services faces a $1 million civil penalty. They can’t send text messages unless they have consent from the consumer and they are barred from falsely claiming to be law firms.
If You’re a Debtor, Know Your Rights
As a debtor, you have rights under the Fair Debt Collection Practices Act (FDCPA). First, debt collectors have to stop calling you if you tell them to remove your phone number and send a written request.
Second, you can tell collectors to not contact your place of work. Debt collectors also cannot harass you by phone. The recent FTC ruling presumably expands this anti-harassment policy to texts and other forms of communication.
Finally, debt collectors aren’t allowed to contact third parties. Neighbors and family members aren’t allowed to be harassed by debt collectors.
What do you think? Have you ever been harassed by debt collectors? Have you ever received calls at work by collection agencies? Let us know in the comment section!