When is debt collection illegal?

If you’re behind on your bills, you’ll probably get calls from debt collectors. Their job is to get you to pay or make arrangements to pay. But any debt collector who harasses or threatens you is breaking the law. The Federal Trade Commission’s cases against Credit Smart and Regional Adjustment Bureau highlight the facts of life every consumer facing debt collection should know.

The FTC alleged that Credit Smart used illegal tactics to pressure people into paying debts. According to the FTC’s complaint, the company threatened to garnish people's wages and sue them for nonpayment — sometimes even for time-barred debts. The FTC’s complaint alleges that Credit Smart sometimes told people they owed debts and interest without having a reasonable basis to say so, misrepresented themselves as working for attorneys or as financial relief counselors, and failed to tell people they were debt collectors.

The Regional Adjustment Bureau, according to the FTC, falsely accused consumers of owing debts, contacted them at work when they knew employers did not permit the calls, made unauthorized withdrawals from consumers’ accounts, and revealed confidential information about debtors to third parties.

These alleged actions violate the Fair Debt Collection Practices Act (FDCPA), which is enforced by the FTC. By law, debt collectors may not:

  • call you before 8 a.m. or after 9 p.m.
  • contact you at work if you’ve told them verbally or in writing that your employer doesn’t allow you to get such calls in the workplace
  • contact a third party, such as a friend or non-spouse family member, about you for any reason other than getting your contact information
  • harass or abuse you or anyone else they contact about you
  • lie about the amount you owe
  • use deceptive methods to collect a debt from you. For example, they may not:
    • claim to be law enforcement officers
    • claim that you’ll be arrested if you don’t pay your debt
    • threaten to seize, garnish, attach or sell your property or your wages — unless they are permitted by law to do it and intend to do so
    • give false credit information about you to anyone, including a credit reporting company
    • use a fake company name

Learn more about your rights when it comes to debt collectors — and how you can regain control of your finances.


Blog Topics: 
Money & Credit


So that's what happened to me! the guy was obnoxious. I hung up on him! thanks for the info!

I applied for bankruptcy in 2007 and one of the companies listed came back to me Dec 2013 trying to collect this debt. I contacted my attorney that I had a time and she wrote them a letter telling them not to contact me again and why. This company put this on my credit reports for Feb 2014 as a bankruptcy again and now will be on my report until 2020. How is this legal?

If you find mistakes when you review your credit reports, send letters explaining the mistakes to the 3 credit reporting companies and the businesses involved. This article provides you with information about what to do and it includes sample letters you can use in your dispute.

information how credit from bankruptcy company put it back

Don't pay them. Contact CFPB!!! I have been working with them and they have helped me with debt buyers. I wrote a letter to complain about a company that wouldn't delete "old" information and they helped me get it deleted. Also, Use debt collections act clause in your state, varies state to state, when dealing with creditors!!!

I experienced that kind of situation like calling me that he is an officer and they will come to my house and serve the complaint and they will come this afternoon but nobody come. I always delete the voice message.

My family had three doctor visits in 2011 and 2012. It is now 2014. The doctor's office never billed our insurance. The medical organization then enlisted a collection agency, which proceeded to place this on my credit report, damaging my credit, forcing me to pay higher interest rates for a car loan and most likely hight insurance rates.

Blue Cross/Blue Shield said the provider must file a claim within 180 days of the service. Blue Cross/Blue Shield never received claims for the service dates. They told me after 180 days, they do not pay AND the healthcare provider can't attempt to collect from me. The healthcare provider is supposed write off the bills at that point. They did not, sent it to collections, which was then place on my credit report. How much time do they have to correct all credit reports? As this was never supposed to be sent to collections or placed on my credit report? Should this be expunged from my credit report, rather than shown closed, as it should NEVER have been there in the first place?

Are regulations in place to collect mandated damages from the healthcare provider and collection company?

They've called my Mom & sister at work threatening ME when I NEVER provided any other contact phone # except my cell #. I'm enraged at how my rights have been violated over the last six months by creditors. The FTC provided excellent information & ammunition for my attorney.

This blog entry and many of the comments show that unscrupulous debt collectors will go to great lengths and don't mind violating the law. Aside from the Federal Act, most states have their own laws against this kind of activity. Texas, for example, has a fairly strong statute that protects people from harassment. My law firm recently took a Texas debt collection practices case that involved a person getting sued over a credit card he never opened. He was a victim of identity theft. The collection agency hasn't dismissed the lawsuit yet, even after they were told the account was fraudulent.

We keep getting calls for a debt that is not ours, we have written letters and mailed them certified with return receipt and they refuse to do anything but continue to send debt letters and call our house. We have never had a charge card with the company where the debt occurred. We contacted them and they can't do anything because they sold the account and it's been resold. It's not our flipping debt and the harassment is too much. This is wrong. There should be a legal requirement for debt collectors to verify that the debt actually belongs to the people they call and mail and if they don't verify and fix their records they should be fined $25k per wrong collection attempt.

Can I get an advise about a supposedly debt I had more than 10 years ago? I cant remember it anymore or have no recollection of the debt. I contacted the collection agency after I received a letter. The lady said that my debt is higher now because of interest. Thank you.

My son incurred $600 dollars worth of charges for copayments. He was 24 at the time the expenses occured. He is insured by me,thanks to new laws, but does not live at home. I received a call from a collector that states the charges are my responsibility. Is this correct?

These FTC articles tell more about your rights when it comes to debt collectors — and how you can regain control of your finances. You might want to read about choosing a Credit Counselor, a person who is certified and trained in consumer credit, money and debt management, and budgeting.

Yesterday when my wife used her debit card it was denied and when she inquired with the bank they told her that all the funds we had we garnished due to a judgment from 2012 on a credit card bill from 2006. We were not served prior to this garnishment of our funds (I call it robbery) or have had any contact with the so-called debt collection agency. We found out that this was done through the local sheriff's office but again did not receive any notice prior to their action. We thought we had resolved all these bills as we had filed bankruptcy in 2007 and worked with our attorney to resolve all past financial issues. We are supposed to be receiving some papers and a chance to refute this action, but again it is after the fact that the money in our bank accounts was taken without prior notification or even a chance to negotiate a settlement. What actions can we take to quickly resolve this.

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