FDCPA Violations Shut Down 3 Debt Collection Agencies

In a recent unfair debt collection lawsuit, federal courts from New York and Georgia temporarily shut down three debt collection agencies. The Federal Trade Commission (FTC) accused the agencies of using deceptive and threatening text messages to in their debt collection practices.

The FTC alleges that the bill collectors send the text messages in an attempt to trick unsuspecting debtors to call them back, and had included several false statements to initiate payment. Some of the text messages included notifications of payments being decline or that the payment was scheduled for a certain date. After sparking fear of financial complications involving potential problems with their credit cards, the debtors were tricked into contacting the debt collection agencies.

Background on FTC Debt Collection Litigation

According to the FTC, the debt collection agencies reportedly used illegal debt collection practices by intimidating or using misleading statements to collect payments on the debtors. These practices include threats of arrest or filing potential legal action against the consumer. Officials on the case found the unfair debt collection method used were despicable and underhanded. The Fair Debt Collections Protection Act (FDCPA) compliance requires all debt collectors to clearly identify themselves, the company they represent, and must clearly explain their intent during the call.

These deceptive texts messages came under the Federal Trade Commission’s radar several years ago, after catching wind of them through consumer sources. The FTC states that this has become an unfortunate trend where debt collection agencies use intimidating tactics and unfair debt collection practices to collect debts. The agency advises consumers to be wary of odd text messages.

It is important to note that FDCPA violations include using any language that involves threatening, harassing, or lying to the debtors. FDCPA guidelines require companies to send debtors a written validation notice within five days of contacting them. This debt collection letter must tell the debtor how much money they owe, the name of the creditor, and how to proceed in countering the debt if the debtor does not think they owe the money.

Legal experts advise consumers to never respond to a debt collector in any way or provide any personal information before they receive a valid notice from the debt collections agency. If a debt collector fails to comply to FDCPA laws, it could result in numerous fines or business shutdown.

What is the Fair Debt Collections Protection Act?

As experts from the Federal Trade Commission mentioned, it is becoming increasingly more common that debt collectors resort to illegal debt collection practices in order to collect on a debt. In order to protect consumer from debt collector harassment, Congress passed the Fair Debt Collections Protection Act in 1978. While debt collecting is a perfectly legal practice, it is now illegal for debt collection companies to use any abusive language or intimidating collecting tactics, such as issuing threats they have no authority to execute.

Essentially, the FDCPA was created to establish a set of rules and regulations for debt collectors to collect debts, while also allowing consumers to dispute a debt if they believe if the debt is not theirs or if the debt is an inaccurate amount.

Despite the FDCPA regulations, experts observe that a number of debt collectors reportedly commit numerous FDCPA violations when trying to collect a debt. If a debt collection agency is found to be in violation of the FDCPA, the debtor is entitled to receive $1,000 in statutory damages, along with any actual damages the consumer may have suffered.

Join a Free Unfair Debt Collection Class Action Lawsuit Investigation

If a lender or debt collector engaged in unfair debt collection practices, you may have a legal claim and could be owed compensation for violations of the Fair Debt Collection Practices Act (FDCPA).

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DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.