May 10, 2011
If money is society’s great equalizer, then debt is the level playing field where everyone struggles to find their balance. According to the Federal Reserve, as of 2010 consumer debt stands at $2.4 trillion. For consumers in the midst of the Great Recession finding financial equilibrium is difficult enough without the added pressure of debt collection harassment.
According to the Federal Trade Commission, the nation’s consumer protection agency, collectors are barred from using abusive, unreasonable or deceptive practices to collect funds from you. This mandate is known as the Fair Debt Collection Practices Act (FDCPA) and it covers personal, family, household and credit card debts, along with auto loans, medical bills and mortgages. It does not cover debts for running a business. However, despite being on the books since 1978, few consumers are aware that FDCPA allows them to sue collectors who violate the Act. Up to $1,000 in statutory damages can be collected per company, with the possibility of additional compensation for proven actual damages.
One man who is helping to empower victimized consumers is attorney Abel L. Pierre. He has won clients as much as $12,000 in damages. The Atlanta Post caught up with Pierre to learn more about what constitutes harassment, how suing a bill collector will impact your credit score, as well the timetable for the legal process.
Harassment takes many forms — from phone calls, to threats, to actual judgments against consumers. What’s the most prevalent form of abuse that your see?
Phone call harassment, such as multiple phone calls to a debtor and their place of employment after they are told not to call back or receive a cease and desist letter. Plus they hold conversations with people not authorized to receive information about the account. The other main area of harassment is in the form of obtaining judgments against debtors without following the procedural law by local or state courts. Debt collectors go ahead and commence legal actions by the thousands, but don’t notify the debtors of a lawsuit and that they’ve obtained a judgment. There are often mistakes and people are sued for debts they don’t owe at exorbitant amounts. Plus they freeze bank accounts and garnish wages and these cases are rife with abuse.
It’s also been reported that harassment through social networking has become a growing issue, with collectors targeting people on Facebook, via email and text messaging. Presently there is no explicit language that limits this in FDCPA.
Yes, it’s not specifically covered by the present law. However, the use of social media, or any other medium, is covered by the present law because it prohibits bill collectors from doing anything false, deceptive or misleading when they attempt to collect a debt. A collector may send the debtor a message through Facebook, however, if the debtor sends them a cease and desist letter, then the bill collector can’t continue to send messages through Facebook. Although it’s not specifically mentioned it is definitely regulated.
That still appears to present a loophole for collectors to exploit, especially since most consumers are not aware of the Act’s details. Do you think it needs to be more explicitly communicated?
It doesn’t create a loophole but it does create ambiguity. However, as the law stands now, it covers all debt collection activity with provisions which really do regulate activity which may not be specifically mentioned. It would be difficult for any judge, in my opinion, to rule that if a debt collector posts a collection letter on someone’s Facebook wall that it is appropriate under the FDCPA. The law regulates all telephone and written communication so there was some foresight from the lawmakers who developed it.
Aside from a lack of awareness, I think that fear of retaliation is one of the major concerns preventing people from suing collectors. When someone sues does it have an adverse effect on their credit score or report?
An FDCPA claim in which somebody sues on the basis of harassment and violations has no adverse impact on credit because it’s not debt settlement. On the contrary, as part of a settlement, sometimes a client can negotiate that a particular debt is resolved in full. That’s different than debt settlement and has a positive impact on the credit report. We can also negotiate to have the negative information, if any, removed from the client’s credit report as well. Nothing under FDCPA requires [the creditor] to settle underlying debt but they perform a cost-benefit analysis. So rather than spend money on attorney’s fees they feel that it’s worthwhile to resolve the debt as part of the settlement.
There are some people who will resist standing up for their rights simply to avoid a lengthy or troublesome legal process. Are there misconceptions that you can clear up about how the actual process works?
An attorney will do that heavy lifting for you and deal with it. Many, if not most, court appearances are done by the attorney and the consumer doesn’t have to be present, so it won’t interfere with work. Plus, most cases are settled before they arrive to trial or arbitration. We’ve been highly successful recovering monetary damages for most of our clients and it only takes on average four to six months.
What do you think is needed for this law to become more embedded as public knowledge so that consumers are empowered in their financial state?
There is a social stigma with this issue. Nobody wants to admit they can’t pay their bills and are having financial difficulty and need assistance. But if somebody has a new car, home or outfit I guarantee you that five of that person’s friends will know. That mentality suppresses the demand for the information even though the information is there. If the client has this issue in any state they can contact the National Consumer Law Center to direct them to an expert attorney in their area. People don’t have to deal with this and an attorney can help put an end to this.
To report any problem you have with a debt collector contact your state Attorney General’s office at www.naag.org , or the Federal Trade Commission at www.ftc.gov.
If money is society’s great equalizer, then debt is the level playing field where everyone struggles to find their balance. According to the Federal Reserve, as of 2010 consumer debt stands at $2.4 trillion. For consumers in the midst of the Great Recession finding financial equilibrium is difficult enough without the added pressure of debt collection harassment.
According to the Federal Trade Commission, the nation’s consumer protection agency, collectors are barred from using abusive, unreasonable or deceptive practices to collect funds from you. This mandate is known as the Fair Debt Collection Practices Act (FDCPA) and it covers personal, family, household and credit card debts, along with auto loans, medical bills and mortgages. It does not cover debts for running a business. However, despite being on the books since 1978, few consumers are aware that FDCPA allows them to sue collectors who violate the Act. Up to $1,000 in statutory damages can be collected per company, with the possibility of additional compensation for proven actual damages.
One man who is helping to empower victimized consumers is attorney Abel L. Pierre. He has won clients as much as $12,000 in damages. The Atlanta Post caught up with Pierre to learn more about what constitutes harassment, how suing a bill collector will impact your credit score, as well the timetable for the legal process.
Harassment takes many forms — from phone calls, to threats, to actual judgments against consumers. What’s the most prevalent form of abuse that your see?
Phone call harassment, such as multiple phone calls to a debtor and their place of employment after they are told not to call back or receive a cease and desist letter. Plus they hold conversations with people not authorized to receive information about the account. The other main area of harassment is in the form of obtaining judgments against debtors without following the procedural law by local or state courts. Debt collectors go ahead and commence legal actions by the thousands, but don’t notify the debtors of a lawsuit and that they’ve obtained a judgment. There are often mistakes and people are sued for debts they don’t owe at exorbitant amounts. Plus they freeze bank accounts and garnish wages and these cases are rife with abuse.
It’s also been reported that harassment through social networking has become a growing issue, with collectors targeting people on Facebook, via email and text messaging. Presently there is no explicit language that limits this in FDCPA.
Yes, it’s not specifically covered by the present law. However, the use of social media, or any other medium, is covered by the present law because it prohibits bill collectors from doing anything false, deceptive or misleading when they attempt to collect a debt. A collector may send the debtor a message through Facebook, however, if the debtor sends them a cease and desist letter, then the bill collector can’t continue to send messages through Facebook. Although it’s not specifically mentioned it is definitely regulated.
That still appears to present a loophole for collectors to exploit, especially since most consumers are not aware of the Act’s details. Do you think it needs to be more explicitly communicated?
It doesn’t create a loophole but it does create ambiguity. However, as the law stands now, it covers all debt collection activity with provisions which really do regulate activity which may not be specifically mentioned. It would be difficult for any judge, in my opinion, to rule that if a debt collector posts a collection letter on someone’s Facebook wall that it is appropriate under the FDCPA. The law regulates all telephone and written communication so there was some foresight from the lawmakers who developed it.
Aside from a lack of awareness, I think that fear of retaliation is one of the major concerns preventing people from suing collectors. When someone sues does it have an adverse effect on their credit score or report?
An FDCPA claim in which somebody sues on the basis of harassment and violations has no adverse impact on credit because it’s not debt settlement. On the contrary, as part of a settlement, sometimes a client can negotiate that a particular debt is resolved in full. That’s different than debt settlement and has a positive impact on the credit report. We can also negotiate to have the negative information, if any, removed from the client’s credit report as well. Nothing under FDCPA requires [the creditor] to settle underlying debt but they perform a cost-benefit analysis. So rather than spend money on attorney’s fees they feel that it’s worthwhile to resolve the debt as part of the settlement.
There are some people who will resist standing up for their rights simply to avoid a lengthy or troublesome legal process. Are there misconceptions that you can clear up about how the actual process works?
An attorney will do that heavy lifting for you and deal with it. Many, if not most, court appearances are done by the attorney and the consumer doesn’t have to be present, so it won’t interfere with work. Plus, most cases are settled before they arrive to trial or arbitration. We’ve been highly successful recovering monetary damages for most of our clients and it only takes on average four to six months.
What do you think is needed for this law to become more embedded as public knowledge so that consumers are empowered in their financial state?
There is a social stigma with this issue. Nobody wants to admit they can’t pay their bills and are having financial difficulty and need assistance. But if somebody has a new car, home or outfit I guarantee you that five of that person’s friends will know. That mentality suppresses the demand for the information even though the information is there. If the client has this issue in any state they can contact the National Consumer Law Center to direct them to an expert attorney in their area. People don’t have to deal with this and an attorney can help put an end to this.
To report any problem you have with a debt collector contact your state Attorney General’s office at www.naag.org , or the Federal Trade Commission at www.ftc.gov.
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