How Federal Rules Protect You When Debt Collectors Call

TAYLORSVILLE, Utah — The pandemic’s economic fallout has made it tough for many Utahns to pay bills on time. Nearly one in four people has a debt in collections right now, according to the Consumer Financial Protection Bureau.

Most debt collectors are just people on the phone, trying to get borrowers to repay what they owe, but some use aggressive or even illegal tactics. If you are getting hounded by calls over a debt, you do have rights and protections when debt collectors cross the line.

LouAnne Schwendiman called the KSL Investigators when collectors were chasing her down over a bill she did not even owe. It turns out someone had used her account with a fuel card company to rack up $500 in fraudulent charges for gas.

Schwendiman had no idea until a month later when a collection agency contacted her.

Even after she disputed the charges, she said the creditor kept calling.

“‘You have to pay this, you have to pay it now,'” Schwendiman said of the conversation. “‘You owe this money. I don’t care if it’s fraud.'”

Strong arming someone to pay up on a debt in dispute is against federal rules under the Fair Debt Collection Practices Act (FDCPA), but that’s not all.

Collectors cannot call you before 8 a.m. or after 9 p.m. They cannot intentionally annoy or intimidate you with call-after-call-after-call. Collectors also cannot use foul language or threaten you with harm or jail time. And they cannot talk to anyone, besides you or your spouse, about the debt, said former debt collector John McNamara, who is now a principal assistant director of the CFPB’s Consumer Lending, Reporting and Collections Markets.

“All of those are examples of what could be considered harassment under the FDCPA,” McNamara said. “Harassment under the Fair Debt Collection Practices Act is any activity that the collector engages in the natural consequence of which is to abuse, harass, or oppress.”

LouAnne Schwendiman is not alone in her experience with debt collectors.

49 percent of all complaints against debt collectors in 2020 involved a debt the person did not owe, according to the CPFB in a recent Congressional report.

McNamara said collectors must verify how much you owe and who you owe it to.

“If you dispute in writing within 30 days… the debt collector cannot call or contact you to collect the disputed part of the debt until the debt collector has provided the verification of the debt in writing to you,” he explained.

Also, collectors can only demand what is contractually owed, said McNamara.

“It’s considered an unfair practice under FDCPA to collect any interest fee, charge, or expense, incidental to the principal obligation, unless it was authorized by the original agreement or is otherwise permitted by law,” said McNamara. “If they demand more than is owed, the consumer should demand proof. A legit collector will provide it. A bad one or a scammer will try to bully their way through the consumer’s concerns and keep demanding money.”

Consumers can also ask for what is called a cease and desist.

“If the consumer advises the debt collector in writing to cease communications, the collector, per the Fair Debt Collection Practices Act, needs to stop communication,” said McNamara. “Furthermore, collectors are prohibited from contacting a consumer at a place or a time that they know is inconvenient for the consumer.”

If you get tangled up with a debt collector not following the rules, he said the best thing you can do is report them to the Utah Attorney General’s Office, the Federal Trade Commission and the CFPB.

“As (complaints) accumulate against a particular entity, that entity is raising its profile to the point where they may draw the attention of federal or local regulators,” said McNamara.

If there is still no letup in the harassment, you can slap the debt collector with a lawsuit.

“The debt collector may have to pay your damages and your attorney fees,” said McNamara.

Those damages could include things like the cost of switching to a new phone to avoid call-after-all from the collector.

Just know, if the debt is real, you are still on the hook for it, even if the collector broke the law.

To file complaints:

• Consumer Financial Protection Bureau (CFPB): https://www.consumerfinance.gov/complaint/
• Federal Trade Commission (FTC): https://www.ftc.gov/
• Utah Attorney General’s Office: https://attorneygeneral.utah.gov/contact/complaint-form/