According to the article entitled “Creditors Play an Unrecognized and Powerful Role in the Debt Collection Process”, the smaller third party debt collectors are under tremendous pressure to collect from consumers in order to get their “small cut” or percentage of what is collected. This pressure is in part what causes them to misbehave or harass, call repeatedly, call family and friends and divulge personal information and more.

Since the debt collection industry is extremely lucrative for collection agencies both large and small, the old adage “if you can’t stand the heat, get out of the kitchen” would certainly apply here. The debt collection industry is huge and continues to grow each year as do the complaints from consumers regarding bad collectors.

The Fair Debt Collection Practices Act was enacted to protect consumers from violations by third party debt collectors. Don’t expect a consumer wallowing in debt and on the receiving end of debt collector harassment to feel sorry for the collection agency because they aren’t making enough profit from their creditor due to a mutually agreed upon, low ball contingency agreement or percentage. Debt collectors, both large and small, need to obey these laws and stop complaining about the pressure to be profitable. That issue is certainly not unique to the debt collection industry.

In an effort to crack down on these judgments based on flimsy evidence, several states, including Maryland, are requiring better proof that debt buyers are suing the correct consumers. They are now not allowed to sue without in-depth knowledge of the case, including whether or not the debt is even still valid. Debt buyers are supposed to sign affidavits swearing they have personal knowledge of a case, but employees are signing hundreds of these per day without even looking at the files. In fact, several debt buyers buy the debt without the supporting documents from the original creditors. How can they swear they have seen the files when they do not even buy it?

Default judgments are highly common, because many consumers do not know they are being sued. Many times, people are not aware of these judgments because flimsy attempts were made to contact them before the lawsuits went to court. The FTC wants to make it tougher on collection agencies before submitting a judgment to the courts, including making it more likely litigants will be able to defend themselves in court. Fairness to consumers is the new name of the regulation game, and in the future, debt collectors will have a harder time suing consumers over their debts. How might consumers view debts after becoming fully protected? Time will tell.

Contact a fair debt lawyer for a free case review.

The firm tried to file for a collections license in July, but was rejected because some of the amounts owed were in question. “It’s a misrepresentation of the amount owed,” said Anne Balcer Norton, the state’s deputy commissioner of financial regulation.

This decision is great news for those who are going through collections proceedings because the cases will all be dropped. Anyone who has spent any money on attorneys or has paid their judgment amount will be repaid with interest.

As alarming as the case may be, it is not simply an aberration. Collection agencies have been trying for years now to collect debts without first verifying whether or not the debts are actually valid. Consider the methods that Bank of America has been using with computer generated calls and other shady tactics. Most people have judgments entered against them simply because they don’t show up to court because they think it is a lost cause.

Fortunately, Maryland is not stopping with Sunshine Financial and is aggressively pursuing other cases against collection agencies that do no follow proper methods of collection. Yes, these debt collectors have a right to pursue money owed to them, but consumers have rights and deserve to know that the balances against them are correct and valid.

While many consumers may find it disturbing news to learn that debt collectors are scouring social networking profiles online, Vytas Kisielius, the CEO for Collections Marketing Center Inc., insists that these sites can be used as a tool to track debtors down without violating the Fair Debt Collection Practices Act (FDCPA). However, he argues, it would be an actionable violation of the FDCPA for collectors to masquerade as another user or post public notices on debtor’s accounts regarding their debts.

Rumor has it that the FTC is considering new regulation regarding how debt collectors can use emerging media like social networking sites to search for and contact debtors. Betsy Lordan, an FTC spokeswoman, denies the credibility of these rumors. She states that at this time the FTC is still reviewing transcripts and comments from a workshop the agency held earlier this year. It is unclear at this time if the agency may proceed with new regulation once that review is complete or if stricter enforcement of the FDCPA may result. Many experts in the field of debt collection, including Kisielius, argue that the existing regulation would be sufficient to protect consumers if the agency were more dedicated to enforcement.

Contact a fair debt lawyer for a free consultation. Robo or auto dialer calls from debt collectors to your cell phone can be stopped.

Under the present laws, an expired debt can be sold by a creditor to a collector for a lesser amount. The debt collector can then proceed with collection efforts. If the debtor makes any payment towards this old expired debt, it then reactivates the clock on the statute of limitations and the collector can take the debtor to court to sue and garnish wages in certain circumstances.

Under the proposed bill, a debt collector would need to inform the debtor of the expired statute of limitations and advise that any payment, if state law applies, would restart the clock on a time-barred debt. In addition, they could not sue if the debt did fall outside of the statute of limitations.

If you are harassed by debt collectors contact our office today at 888-595-9111 for a free attorney evaluation. Or visit Debt Collector Problems on the web.

With the official launch next month of the new consumer protection arm of the FTC, the Consumer Financial Protection Bureau, debt collectors and their practices will come under additional, well needed scrutiny. Prior to the CFPB, the FTC was responsible for regulating debt collectors and the debt collection industry and though some crackdowns were enforced, the FTC could not write rules and regulations and their plate was always full of debt collector complaints, in fact collector harassment was the largest amount of complaints received by the FTC in 2010.* Its difficult to believe that the debt collectors are the ones deserving better treatment with the enormous amount of complaints coming from consumers.

New communication tools, specifically e-mail, cell phones, text messaging, the internet and social media, have made the Fair Debt Collection Practices Act, enacted in 1977, outdated and the collection indsutry has their wish list of proposed changes ready for review. With so many consumers today still struggling to recover from hard times, providing the collection industry with additional ways to badger those who are already suffering doesn’t seem to be in the consumer’s best interest though admittedly, the laws need updating and the potential changes may make it better for the both collector and debtor.

If you think your fair debt rights have been violated by a debt collector, call 888-595-9111 or visit Debt Collector Problems.

Source FTC.GOV

According to Minnesota Attorney General Lori Swanson, “Midland has perverted the justice system by filing robo-signed affidavits in court and hounding citizens for debt they don’t owe.”

The lawsuit, filed in Hennepin County, Minnesota, reportedly includes testimony from Midland employees that some had signed as many as 400 affidavits a day without reading through them.

Minnesota’s action follows an Ohio Judge’s ruling that cleared the way for the lawsuit to proceed.  The Judge ruled that Minnesota’s cases would not interfere with a previously filed $5.2 million class action against these giants of the debt collection agency industry. The lawsuit ask for a cessation to improper practices and fines of $25,000 per violation and for contempt of court.

This new consumer protection, federal watchdog agency will be named the Consumer Financial Protection Bureau, and was created by a law enacted last year. According to reports, this agency will have the ability to set rules, whereas the FTC can investigate complaints, but not write rules.  

Regulations need to be addressed regarding the debt collection industry and communication with debtors  using  new techology including voice mail, cell phones and e-mail.

The newer technological advancements have brought to the forefront the need for stricter regulation as they create even greater opportunity for harassment and abuse by debt collectors in their efforts to communicate with a debtor. The new agency will be able to listen to complaints and act to resolve these complaints as well.

This move comes at a time when debt collection activity is on the upswing, as more consumers struggle to pay credit cards, hospital bills, loan and mortgages. Many creditors employed their own in-house collectors in the past, but with the increase in consumer debt, these companies have opted to hire third party debt collectors in an effort to bring in as much of the overdue payments as possible.

If you think a debt collector has violated your FDCPA rights, help is available through an experienced fair debt lawer.

The Federal Fair Debt Collections Practices Act, the law that protects consumers from debt collector harassment, was enacted long before social media or the internet. Thus the  line can become blurred between what is considered permissible contact and what constitutes harassment.

So may a debt collector reach out to your Facebook friends or family, post on your wall or “friend” you?  Two recent cases, one in Florida and one in California, have put some precedents in place for Social Media contact and the debt collection industry.

A judge in Florida ruled that a debt collector or creditor may use Facebook as a phone book of sorts to locate a debtor. However, stalking a debtor by repeated contact via Facebook, posting offensive comments about personal debt on a debtor’s public wall, or contacting Facebook friends and family members using the social media site is not legal.

If you willingly accept a debt collector as your facebook friend you can “unfriend” after the fact.  And take time to review all your Facebook privacy settings to make sure you aren’t giving everyone access to all your photos, friends and personal information about you.

If you think a debt collector has violated your rights in an effort to collect a debt visit Debt Collector Problems and complete the quick form or call for a free consultation.