How Debt Collection Laws Help Pennsylvanians

Past due bills debt

When you owe money to a debt collection agency, its employees have the right to contact you and try to recoup that debt.

But those rights only go so far. The federal Fair Debt Collection Practices Act regulates what debt collectors, or law firms acting as collectors, can do when contacting Pennsylvania consumers, and bars them from engaging in deception while trying to recover money that is owed.

Continue reading How Debt Collection Laws Help Pennsylvanians

How Stand Against Collection Agency Harassment

You pride yourself on paying your bills on time. It’s how you were brought up.

But like a lot of people these days, you found yourself living paycheck to paycheck, and some bills became a lot harder to pay. Now you owe money to a collection agency, and their calls and letters just never seem to end.

However, there’s a line between a company making legitimate attempts to recoup what they’re owed and debt collector abuse. You might owe money, but you still have rights. If you think a collection agency has strayed into the latter category, there are things you can do to protect yourself.

Debt Collector Harassment

Debt collection is a multi-billion dollar industry that affects over 70 million consumers in the United States.  A recent report released by the Consumer Financial Protection Bureau found that over one-in-four consumers contacted by debt collectors felt threatened.

The Fair Debt Collection Practices Act (FDCPA) is a federal law that offers protections to consumers for debts that have been sent to collection agencies. Personal obligations, such as credit cards, medical bills, utility bills, or loans, are covered under the FDCPA. When the law has been violated, the consumer may take legal action against the collector.

Common violations of the FDCPA include:

  • Misrepresentation of the debt to the consumer. 
  • Threats of legal action when none is intended.
  • Aggressive, harassing methods are used by the collector.  
  • Collection contact after a consumer has filed for bankruptcy.
  • Failure to report a disputed debt accurately to the credit bureaus.

The Collection Process

Consumers seek credit for a variety of purposes –personal or auto loans, store credit cards, payment of medical or utility bills — the company that provides the credit — the bank, credit union, lender, doctor’s office or utility — is call the creditor.  When the borrower falls behind on payments to the creditor, attempts are made to collect on the defaulted account.  If a creditor’s internal collection efforts have been unsuccessful, the creditor may choose to hire a third party collector – a collection agency or collection law firm – to continue collection.

These delinquent accounts may be assigned to a collector for a specific period of time, or they could be sold to a collector.  Regardless, once the debt is in the hands of a third party collector, the FDCPA must be followed.  If the collector uses tactics which violate the FDCPA,  the consumer may file a lawsuit against the collector.  Lawsuits pursued under the FDCPA provide for the debt collector to pay the consumer’s legal fees – whether the debt is owed or not.

Here are three situations in which you might have a case for debt collector harassment:

  1. They don’t offer proof of your debt
    Under the FDCPA, collection agencies have to give consumers the name of the original creditor who is claiming the debt, how much they’re owed, and show proof of how the amount claimed was calculated. If a collection agency won’t show proof that you owe a debt, you may be able to  take them to court.
     
  2. They flat out lie to you
    If a debt collector lies while trying to recover what you owe, they’re violating the FDCPA. Have they told you that you owe more than you actually do? Claimed to be a lawyer when they aren’t? Threatened to sue when they have no grounds to do so?  If so, you  may have a case for a debt collector harassment lawsuit.
     
  3. Their phone calls go too far
    The FDCPA forbids debt collectors from using harassing tactics to collect debts. This includes making threats, using obscene language, speaking with someone else about your debt, or repeated phone calls that are intended to harass or abuse.
     

Remember that you can get debt collectors to stop calling altogether. If you notify the collector in writing by sending a Cease & Desist letter, the calls are to stop. They can only get in touch with you again to say that there will be no further contact from that collection agency.

If you tell a debt collector that you have hired an attorney, they’re required to contact your lawyer instead of you or risk violating the FDCPA.

Flitter Milz can help.

Unexpected life events — job loss, illness, divorce — can place anyone in a vulnerable position.  Finances become tight, payments are missed and collectors begin to call or send letters. Sometimes, family members, co-workers or neighbors may be contacted.  Shame and embarrassment, coupled with the financial pressure, make life unbearable.  That’s where Flitter Milz steps in.

Our debt collection attorneys understand the FDCPA.  They know how to stop abusive collection tactics. They will fight for the consumer in court to seek the justice that is deserved. 

Take Action Today.  Free Legal Evaluation.

Call toll-free at 888-668-1225, or contact us today 

 

Flitter Milz KOs Collection Giant Midland Credit Management

September 24, 2018/Philadelphia, PA

U.S. Court of Appeals precedential ruling impacts consumers nationwide

In an important ruling this week, the United States Court of Appeals for the Third Circuit agreed with Flitter Milz that a collection dun sent to a consumer was deceptive and in violation of the federal law regulating debt collectors.

Midland Credit Management, one of the largest debt-buyers and debt collectors in the United States, sent our client a collection notice stating Midland would “report forgiveness of debt as required by IRS regulations.”  Flitter Milz argued that the debt involved was so small that there is nothing ever to report to the IRS, and the statement about Internal Revenue was just a scare tactic.

The federal appeals court, sitting in Philadelphia, agreed that the consumer might be persuaded into thinking that a settlement may be reportable to the IRS, and this remark is misleading under the consumer laws.  The Court agreed with Flitter Milz, holding that “it is not merely the inclusion of a lie, but also incomplete” language in a collection letter that may violate the consumer laws.The Court has told Midland that ‘half-truths’ to consumers are not good enough.

Flitter Milz is a nationally recognized consumer protection law firm representing consumers in matters against collection agencies and collection law firms for violation of the Fair Debt Collection Practices Act. “This victory, is not just for our client and firm, but for consumers across the U.S.”, said Cary Flitter and Andy Milz.  

To learn more about this case, Robert A. Schultz, Jr & Donna Schultz v Midland Credit Management, click here .  Consumers with questions about collection contact, calls or letters, from Midland Credit Management, contact us.

Midland Credit Management is a billion dollar purchaser of consumer debt, who collects and files collection lawsuits in Pennsylvania, New Jersey, New York and across the country.  

What to Do When You’re Contacted About a Paid Debt

Sometimes collectors contact consumers and ask for payment on a debt that was already satisfied. Whether the collector made calls or sent letters, the consumer may be left confused and uncertain about whether there was a clerical error or if the collection effort is a scam.

The Fair Debt Collection Practices Act outlines actions that debt collectors can and cannot take. If collectors contact you about a debt that was already paid, you have the right to request proof of the debt and how it was calculated. You can also request confirmation that the collector is permitted to collect the debt.

When Collection Contact Continues

Check Your Records

Once a debt has been assigned or sold to a collector, the consumer may request information about the debt from the collector, not from the creditor. If you are not sure whether a claimed debt is owed, gather your account statements, bank records, and payment history. It may also be helpful to obtain current credit reports. These documents will assist in determining whether money is still owed. Once you’ve reviewed your papers, write the collector to dispute the debt.  Be sure to enclose documentation with your letter that proves the debt was satisfied.

Request Proof from the Collector

If you do not have proof showing payment of the debt, obtain payment information from the debt collector. You may request that the collector provides account statements from the creditor, which show the period when your last payment was made. Send a Validation and Itemization letter to the collector asking for verification of the debt and how the claimed balance was calculated.

Document Your Contact

Maintain documentation of all correspondence with the collector, including letters sent and received, and proof of payments. Good record-keeping, the ability to show account history, and proof of collection disputes and responses become helpful in evaluating whether there is a claim against the collector for violating your consumer rights.

If collectors contact you by phone, keep a call log. Note the date, time of day, caller ID, name of collection agent and agency, phone number where the call was received, and details of any phone conversations, messages, or texts. This information may be useful in determining whether the collector failed to comply with the Fair Debt Collection Practices Act or the Telephone Consumer Protection Act.

Seek Legal Help

A qualified consumer protection attorney can help evaluate whether the debt collector has violated your consumer rights. Once you’ve hired an attorney, you may inform the collector with your attorney’s name and contact information. If the collector continues to contact you after you obtain legal representation, your consumer rights may have been violated under the Fair Debt Collection Practices Act.

 

Stay Calm When Debt Collectors Call

When it comes to debt collection, it’s important to find a balance between looking out for scams and ensuring you pay the debt you actually owe. You should begin by establishing whether or not you owe the debt the collector is contacting you about. Debt negatively affects your credit report and credit score. Make sure you take action to resolve any debts you owe.

Know How You’re Protected

To verify that the collection contact is legitimate, ask questions to find out the name of the collection agency or collection law firm and where they are located. Also, request details about the debt including the name of the original creditor, the account number, and the balance claimed. You can write to the collector and request a validation and itemized calculation of the debt. 

As a consumer, you’re protected against harassment and other unfair practices by the Fair Debt Collection Practices Act (FDCPA). It’s important to ensure collectors aren’t using unfair tactics against you. Under the FDCPA, debt collectors cannot:

  • Contact you before 8 a.m. or after 9 p.m. without permission
  • Continue to call your place of employment after you ask them to stop
  • Contact friends or family members about the debt or disclose information to them 
  • Harass you using threats or profane language
  • Lie about who they are or the debt you owe

Knowing your rights before taking any action makes a potentially frustrating situation easier to handle.

Take the Appropriate Action

Once you know whether or not you owe the debt, figure out an action plan. If you owe the debt, you may want to establish a payment plan. You’ll need the collector to provide written documentation showing the total balance owed. Then, figure out how much you can pay each month until the obligation is satisfied. If you enter a payment plan with a collector, be sure to obtain written confirmation of the payment terms, the payment due date, and where your payment should be sent. Keep accurate records of all payments made and when they were applied to your account.  

If you’re convinced that you do not owe the debt, write a dispute letter and include any proof that shows the debt was already paid or does not belong to you. 

Stop Collection Contact

At any time throughout the process, you can write a Cease and Desist letter to the debt collector that states they need to stop contacting you. This may be be helpful if the debt collector is contacting you at work, during odd hours, or if you feel your consumer rights are being violated. Be sure to send your correspondence to the collector by certified mail with a return receipt. It’s important for you to have proof that your letter was received.

A Cease and Desist letter does not make the debt go away. Often the collector will transfer the debt to another collector or back to the original creditor. Once a Cease and Desist letter is sent to a collector, that collector is not permitted to contact you again or attempt collection. If the collector contacts you after receiving your Cease and Desist letter, reach out to a qualified consumer protection attorney to evaluate whether your rights have been violated.   

Free Legal Help – Whether You Owe the Debt or Not

Whether you owe the debt or not, a consumer protection attorney will evaluate any communications, including calls or letters, received from a debt collector. If your consumer rights were violated, you may be able to pursue a lawsuit against the collector at no cost to you.

How Much Should I Spend on my Credit Card

Credit cards can give you a lot of flexibility when it comes to your finances. When you get a credit card, you have the freedom to make purchases even when you don’t have any cash on hand. As long as you always spend within your means and make payments on time, your credit accounts can add diversity to your credit history and reflect positively on your overall financial health. 

Most consumers know that every credit account has a spending limit. If you exceed this limit, purchases may be declined. This doesn’t mean that you want to spend just up to your limit every month. If you consistently max out your credit cards, or come close to doing so, it will negatively affect your credit and lenders will see you as a higher risk borrower. 

How much credit do I have?

The easiest way to see your credit limit is to log in to your online account or check the monthly statements that you receive in the mail. You should see the available credit on the account clearly listed. 

How much credit should I use?

Ideally, you don’t want to spend more than 30% of your available credit. This means that if your account has a $1,000 credit limit, you should avoid spending more than $300 each month. 

If your available credit is fairly low and you’re having a difficult time keeping your spending below 30%, consider making multiple payments per month to keep your balance down. Credit companies typically report balances to the bureaus at the end of the month. When it’s reported, you want your usage to be above 0%, but below 30%. This shows that you’re a responsible borrower. 

Can I increase the amount of credit that I have?

If you regularly use more than 30% of your available credit, it might be a good idea to see if the creditor is willing to increase your limit. The creditor will probably need to perform a hard inquiry to assess your creditworthiness. Hard inquiries temporarily have a negative effect on your credit. 

Creditors are often willing to increase your limit if you make payments on time and in full each month, or if you’ve had an increase in income. 

You could also consider opening another credit card. Each individual account has its own set limit, so opening a new account will give you an additional 30% of the new account’s limit. Keep in mind that opening another account also requires a hard inquiry on behalf of the creditor. For this reason, it’s best to choose between opening a new account or requesting that an existing creditor increase your limit. This way, you avoid two hard inquiries. 

Credit cards offer significant flexibility and convenience, and they help build a well rounded credit history. Keep your credit utilization ratio low to continue making the most of your credit accounts.
 

Do You Actually Owe a Debt?

When a debt collector contacts you to collect payment on an account, it can be scary and overwhelming, especially if the debt in question is unfamiliar to you. Collectors may contact you from an agency you’ve never heard of, and some may even threaten legal action against you. 

It’s possible that you don’t recognize the debt because the original creditor assigned it to a collection agency or sold it to a debt buyer. Lawyers and repossession agents may also try to collect on debts in certain situations. 

However, it’s also possible that you don’t recognize the debt because you don’t owe it. 

What to do when you’re contacted by a debt collector

Whenever you receive any debt collection contact, the collector is required to mail a letter within five days that tells you the amount of the debt and the original creditor. This letter should also explain your rights under the Fair Debt Collection Practices Act (FDCPA). If you don’t receive this letter, it could be a sign that the collector who contacted you isn’t legitimate. 

If you receive this letter and still don’t recognize the debt, send a validation and itemization letter to request proof of the debt and proof that the collector has permission to contact you about it. An itemization will show you how the balance was calculated. It will include the original balance amount as well as any interest that was added. If you have documented proof that you don’t owe the debt, send this to the collector as well. Always keep a copy of any correspondence with the collector. 

Debt collection scams do exist

One woman received debt collection calls saying she would be sued over a bill she hadn’t paid on a payday loan. She knew this was inaccurate, but debt collectors can be very convincing. It’s a red flag if you can’t find information about the collection agency or company, or if they threaten you with arrest. 

The steps outlined above will help you ensure that the amount the collector claims you owe is accurate and legitimate. If the company can’t prove that you owe the debt, contact a consumer rights attorney to discuss your options. 

Know your rights

Even if you determine that the collection is legitimate, debt collectors must follow all regulations under the Fair Debt Collection Practices Act. They can’t threaten or harass you, and if you ask them to stop contacting you, they’re required to do so. Learn more about your rights under the FDCPA, and seek legal help if you think your rights have been violated. 
 

Debt Collection Against Military Personnel

When an account goes into collection, it’s stressful and overwhelming for anyone. But debt collection can be especially troublesome for military service members. Financial trouble could result in negative consequences like loss or denial of security clearance. 

Frequent moves and relocations can make it difficult for service members to keep up with bills and collection notices. Set up automatic payments when you can and always make sure to update your address to avoid missing bill payments.   

If an account does go into collection, debt collectors often use shady tactics to try and collect payments. However, the Fair Debt Collection Practices Act prohibits collectors from threatening to reduce a service member’s rank or security clearance. They are also not allowed to threaten to contact chain of command. Learn more about what debt collectors can’t do under the FDCPA.

Military personnel are also protected by the Servicemembers Civil Relief Act. This legislation provides some protections against car repossession for those in the military. 

Make sure to educate yourself on how to manage your finances and learn about the laws that exist to protect you. Learn how to get a free copy of your credit report, and how to dispute errors in your credit history

Read this article from CBS News for more information on how debt and financial trouble affects service members.

What Debt Collectors Don’t Want You Know

It can be scary and overwhelming when a debt collector starts contacting you about unpaid bills. With household debt at $12.7 trillion in the United States, this is a reality that many Americans have to face every day. However, there are certain things that debt collectors don’t want you to know about their collection tactics. Learn more about what they can and can’t do so you’re better prepared when they contact you. 

They have to follow certain laws when they contact you

The Fair Debt Collection Practices Act (FDCPA) protects you from unfair debt collection practices. The Federal Trade Commission (FTC) enforces the act, which prohibits collectors from using abusive or deceptive tactics to get you to pay. They can’t threaten you, make false statements, or misrepresent how much you owe. 

For more on your protections under the FDCPA, refer to this article with common questions from the FTC. 

You can ask them to stop contacting you

If a collector is relentlessly contacting you, you can ask them to stop. Send a cease and desist letter through certified mail with a return receipt. However, keep in mind that this doesn’t make the debt go away. The debt will most likely be reassigned to a new agency or law firm to attempt collection. 

If calls are disruptive, you can also ask that the collector only contact you during certain hours of the day. 

They can’t give information about your debt to family or friends

In some cases, debt collectors will contact family members or friends to get your contact information. While this is acceptable, the collector is not allowed to share details about your debt. If they do so, it could be a violation of your consumer rights. 

If a family member or friend has been contacted about your debt, ask that they write a third party statement with details about the contact. They should include the date, time of day, name of the collector, and details about any phone conversation or messages left. Have this statement reviewed by a qualified consumer protection attorney.

You’re entitled to a debt validation

Under the FDCPA, you should receive a letter in the mail within five days after a collector contacts you. The letter should state the amount of the debt and the name of the original creditor. If you don’t dispute the debt within 30 days of receiving this letter, the collector can assume the debt is valid. 

If you do dispute the debt, you can send a validation and itemization letter to request proof of the debt and a detailed itemization of how the balance was calculated. We recommend that any communication with the collector be done in writing and sent through certified mail with a return receipt. Be sure to keep copies of all correspondence you have with the collector.  A consumer protection attorney can evaluate these communications for compliance with the laws governing debt collection.