Debtor Consumer Rights
Know your rights as a debtor.
The FDCPA
Debt Collection has historically been a very ugly business full of threats, harassment and dirty-handed moves in an attempt to collect a debt owed in any way possible. The federal government tried to put an end to that when it made a law called the Fair Debt Collection Practices Act (FDCPA). Before the law was passed, debt collectors would call you many times a day (and night), threatening, screaming and cursing at you trying to get you to pay the money they said was owed. They would call your job, family and friends telling them that you owe them money and that they are trying to get a hold of you. They would even come to your house to try to get you to pay the debt. They would make up lies to trick you to pay, often pretending they were working for the government or were attorneys at law. Due to the widespread abuse, the government took action and enacted the FDCPA to protect consumers from abusive and fraudulent actions by collection agencies and debt buyers. However, the FDCPA does not apply to the lender themselves (like Capital One or American Express) or business debts (including business credit cards). The FDCPA is a good starting point to keep debtors from getting harassed, but the collection process is still full of abuse and trickery.
The FCRA
As credit reports became used more frequently by lenders to evaluate your financial health when deciding on whether to give you a loan, to a point where it is now exclusively used by everyone in the financial industry, people became aware that their credit reports usually contained errors which would result in the lender declining your loan request or giving you a loan with a really high interest rate. These errors were common as companies were either careless with their reporting, didn’t update the credit report, or even intentionally reported false information (typically by debt collection companies to pressure you to pay their debt). Accordingly, the federal government made a law called the Fair Credit Reporting Act (FCRA) which tried to stop careless and fraudulent credit reporting that was seriously affecting many Americans. This law protects consumers from careless, negligent and fraudulent actions by anyone reporting to the credit bureaus, including the credit bureaus themselves. Unfortunately, even though the FCRA has been the law for many years, it is still very common to have credit reporting errors on your credit report.
Your Consumer Rights
The FDCPA and FCRA provide a way for individuals to fight back against businesses that try to take advantage of them. These laws hold banks, businesses, credit card companies, and debt collectors responsible for their unfair or fraudulent actions. There are also state laws that copy many of the prohibitions contained in the FDCPA and FCRA, but often expand the law so that more consumer rights are protected. These laws provide you, the consumer, with certain rights, including:
- You have the right not to be contacted again once you get an attorney. After you notify them that you have an attorney, they are not allowed to contact you again and must forward all communication through your attorney
- You have the right to request validation of the debt and have them verify and confirm that the debt is accurate. Unfortunately, this process is so basic that in reality it just makes them look at the account a second time to make sure they didn’t make any typos and send you another letter confirming certain information.
- You have to receive proper law suit notification. Process servers (the people that come to your house and give you the lawsuit if served by hand) have had many instances where they say they served you when in fact they just threw away your lawsuit and took the day off. If was so common that it is commonly referred to as ‘sewer service’.
You have the right to an accurate credit report. Recent studies have found that credit reporting errors were found in 79% of all credit reports, with 25% serious enough that it could have resulted in a denial of credit.
Need help understanding how to protect your rights as a debtor?
Law Offices of Joseph I Harrison
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