Ohio Consumer Law Blog

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Problems with Debt Collectors? You Need to Know Your Rights.


At one time or another, odds are you have owed someone money.  It could be anything from a forgotten utility bill to an overdue credit card payment. Maybe you just forgot about the bill and needed a reminder to pay it.  But when a simple reminder doesn’t solve the problem, you may find yourself being pursued by a law firm or debt collection company.  Third party collection agencies have many legitimate tools at their disposal, but what are your rights and protections?  What remedy do you have when these rights are violated?

If you owe a debt related to your business, for example, the purchase of a bulldozer for a demolition company, you have very few, if any, protections from debt collectors.  However, federal and state law protects you from unsavory conduct of third party debt collectors when your debt is a “consumer debt,” meaning the debt was incurred for personal, family, or household purposes, and not for your own business purposes.  The most important law, the Fair Debt Collection Practices Act, is a federal law which sets out rules that third party debt collectors must follow.  Specifically, the Act creates the following rules:

  1. In the first written communication between the debt collector and you, the debt collector must inform you that you have 30 days to dispute the debt.
  2. The debt collector must tell you in that letter the amount of the debt and to whom you owed it.
  3. In all communications, the debt collector needs to inform you that they are a debt collector and that any information you provide to them will be used for the purpose of collecting the debt.
  4. They cannot call you before 8am or after 9pm.
  5. They cannot threaten you with immediate garnishment of your wages or your bank account unless there is a judgment against you.
  6. They cannot demand immediate payment in their first written letter to you.
  7. They cannot threaten you with arrest or incarceration.
  8. They cannot tell others (except your spouse) that they are trying to collect a debt from you.
  9. They cannot ask you to pay more than you legally owe to the original creditor.
  10. They cannot contact you after they know, and you tell them, that you have an attorney, or after you ask them to stop contacting you.
  11. They cannot impersonate or claim to be affiliated with the government.
  12. They cannot threaten to do something to you (even threaten to sue you) if they have no intention or authority to do that when they make the threat.

There are many other rules they must follow, as well—too many to write about here.  If they violate any of these rules, you could be entitled to up to $1,000 in damages, plus attorney fees, or possibly more.  However, you need to contact and lawyer and a lawsuit must be filed no more than one (1) year after the rule was first broken.  After that, it is likely too late to do anything.

If a debt collector violates your rights under this law, it does not wipe out the debt that you owe.  But it does give you leverage to negotiate the amount of the debt, and a good legal claim against the debt collector in federal court.

One client contacted me after a debt collector threatened her with jail time, told her she was being indicted for fraud, yelled and berated her on the phone, attempted to collect a debt that was already paid in full, and claimed to be a part of a governmental agency.  The debt collector even threatened me with arrest!

It is critical to speak to a lawyer as soon as possible after a violation occurs.  Waiting to see if it gets better is not the right decision—it might get better, but it usually does not, and your rights and leverage expire in the meantime.  If you think you have been the victim of illegal debt collection practices in the last year, you should contact an attorney immediately.

One comment on “Problems with Debt Collectors? You Need to Know Your Rights.

  1. Pingback: Class Action Lawsuit Filed by Myers Law Against Debt Collectors Alleges Collectors Threatened Consumers With Prison | Ohio Consumer Law Blog

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This entry was posted on October 21, 2013 by in By Daniel Myers, Uncategorized.

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2016 & 2014 Rising Star – Consumer Law – Super Lawyers

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