Consumer Fraud Task Force Urges Consumers To Know Their Rights When Dealing With Debt Collectors

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With complaints over debt collection practices skyrocketing, consumers in Missouri and Illinois are urged to protect themselves against bogus and unscrupulous collectors.

The Consumer Fraud Task Force says that consumers need to know their rights if they are contacted by businesses attempting to recover debts. The Federal Trade Commission’s Fair Debt Collection Practices Act sets out specific rules on how collectors must operate.

“In this difficult economy, people who have never before dealt with debt collectors are receiving phone calls,” the Task Force said. “Sometimes, these callers are trying to collect on debts that were settled years ago or never existed at all. But even callers trying to collect on legitimate debts can become overly aggressive and violate consumers’ rights.”

Some of the questionable or illegal debt collecting practices include:

· Attempting to collect “phantom” or “zombie” debts. Most often, these are debts that were never owed or were previously paid or otherwise discharged.

· Harassing or intimidating collection tactics, usually involving persistent phone calls.

· Telling debtors they will be arrested or have their property seized unless they make payment.

· Claiming that the collector is a lawyer or affiliated with a law firm when that is not the case.

· Withdrawing money from a consumer’s bank account or charging his or her credit card without consent.

· Giving information on a debt to a third party.

· Communicating with a consumer after receiving written notice from the consumer that he or she is refusing to pay or no longer wants to be called.

The Fair Debt Collections Practices Act attempts to safeguard consumers from unscrupulous collectors. Many states have enacted similar laws. The federal act prohibits debt collectors from using threats of violence or harm against an individual, property or reputation. Collectors cannot threaten to garnish a consumer’s wages unless they intend to do so. The act also requires that collectors send you written proof of your debt. In recent months, consumers across the country have filed numerous cases in federal court alleging violations of the act. Additional information, and the full federal act, can be obtained by going to www.ftc.gov.

The FTC report received more complaints about debt collection than any other single industry in 2010 -- 140,000 complaints, up from 120,000 in 2009. In March, the FTC announced that a national debt collection business had agreed to pay a record $2.8 million to settle charges that its aggressive collection techniques violated federal law.

The Task Force is a coalition of local, state and federal government agencies and nonprofit business and consumer groups in Missouri and Illinois that work together to protect consumer and donor rights and guard against fraud. Previous Task Force releases have focused on tax scams, timeshare resellers, home remodelers, work-at-home scams, sweepstakes offers, online auctions, credit repair scams, debt management advice, foreclosure scams, extended auto service contracts, fire and police organizations.