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!!!

My EX boyfriend keeps on contacting or bugging me thru texts saying I owe him money because he helped me before to pay my dorm rentals, and to be honest I don't remember such debts. I even asked him for receipts or any proof that I owe him, he keeps on insisting that the issue is that I don't remember him doing good deeds for me, which is not true... I really don't owe him with the amount he is saying. Every year (randomly) he keeps on messaging me about it then he wants us to be friends. He's stressing me out so bad, what should I do?

You can choose to block phone numbers if you don't want to receive messages or texts, or contact your phone service provider to ask how to handle unwanted messages.

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.

What do you do if the Government employee threatens to sell your property and do a foreclosure on you if you don't pay a student debt?

If you loan from the federal government, and you have a complaint about the lender, call the Federal Student Aid Ombudsman at 1-877-557-2575. You could also contact the  Consumer Financial Protection Bureau at (855) 411-CFPB (2372).

This happened to us! My family & I rented an apartment at Greenhouse Villas in Katy, TX & paid for the entire year's lease up-front. With about 3 months left on our lease, I recieved a great job offer in another state & we decided to move. The same week we were moving, Greystar bought the property from its previous owners & fired (or laid-off) the property managers, leaving no one in the office for us to do a walk-through with.

Since we were moving out early, we weren't seeking the 3-months of rent for the time we wouldn't be residing in the apartment. On the day of our move, we couldn't locate a manager to do the walk-trough as none were currently employed. We thoroughly scrubbed the apartment & left written notice in the night drop box that the apt was now vacant. Our trash can was full so we place 3 sealed garbage bags by the garbage can for the next day's collection.

A few months later, we started receiving collection calls regarding this property. At first they claimed we had broken the lease & owed back rent. We document everything & sent the collection company proof that we had paid the lease in-full & upfront. They then said we had damaged the apartment & owed $700. We sent them the pictures we had taken upon our move-out, showing that the apartment was left in an impeccable condition. We contacted Greystar who told us this time that the $700 was for the trash bags we'd left by our garbage can & they kept insisting that the apartment had been left damaged - though they could not produce any evidence, receipts, etc. to support this. They also claimed a property manager was on-duty that day, though one hadn't been on duty for over a week.

Because I refuse to pay for a false debt, this has damaged us by hurting our rental history for an apartment we paid for in-full & upfront. We refuse to be extorted & are filing a criminal complaint with the FTC & CFPB today as well as a civil lawsuit for damages.

Reading the other reviews of this company on the BBB site we see this is their MO & they do this to many people regularly. I would encourage anyone hurt by this company to file a criminal complaint with the FTC as they obviously don't care about BBB reviews & have an "F" grade. There is also interest in this by a local news station, hopefully they will run the story & help us expose this sham of a company.

My wife just got a collections notice for her cell phone company. Here's the weird part: She is current on her cell phone bill. She has had the same provider for we don't even know how many years, at least 7 years. Her bill is current and paid every month. I do the budget in our house. We both see her bill every month and there are never any late fees or anything.

So, how can a current cell phone provider, that is paid every month on time, send a portion of her bill to collections? That makes no sense. It seems like it should be illegal. It's not like they can't contact her. They send her a bill every month. So, they have her address. And they don't just have her phone number, they are her phone number!

Does anyone out there know if this is even possible?

Unfortunately, there are unscrupulous debt collectors out there that will go after people for debts that are not truly theirs. In this FTC article, you can get information on Fake Debt Collectors. Also, if you’re worried about identity theft, check out this website www.identiytheft.gov for tips and information.

I got a call from a collectors company (Regional) and they are saying my daughter owes a payday loan for $400.00. On top of the loan they are stating that she has to pay a fee to Regional for $800.00. I can help her pay the $400.00 off but, I don't see why she has to pay a fee for $800.00. I cannot help her with that. Is there anyway to get that fee dropped?

It's against the law for debt collectors to someone's family members, friends and employers about their debts. The debt collector should not have told you about your daughter's debt.

Your daughter will know if she really owes the debt. If she does, she should have some papers from the person or company she owes. Or, she can contact the debt collector and tell them she wants written proof of the debt. If she sends a request in writing, the debt collector has to provide verification of the debt in writing.

This might have been a fake debt collector. The article Fake Debt Collectors provides tips to help you handle calls from fake collectors.

n 2011 I was scammed by man Prayer Master Zecheriah and wrote a check Offering to him.I never received what he promised,and the check never was sent to my bank.After 5 years a company Garrett Wright and Associates,from Arizona,has called me threatening to file charges on me.The collector has called some of my family members and discussed every thing with them,even my wife,with out even verifying she was my wife.I did write the check almost five years ago and was actually in Midland a few years after it was written.There never any kind of notice that I had this check out,plus I had Overdraft Protection at Wells Fargo.I believe I was defrauded in the first place and now the same guy has done this ,attempting to defraud me again,and get a kick back from this company.The check was write in Texas.I now live in New Mexico,and the Agency is in Arizona .What can I do now .Oh,and the account is closed since I moved ,but the bank account was open for a while,and they say the check never was presented !

If you really owe a debt, a legitimate debt collector must give you written proof of the debt - if you send him a written request. It's against the law for a debt collector to not give you proof of the debt after you make a written request.

It's also against the law for a debt collector to tell other people, including your family members, friends, and employers about the debts.

The caller could be a fake collector. A caller may be a fake debt collector if he does these things:

  • wants you to pay on a debt you don't recognize
  • won't tell you his mailing address or phone number
  • asks you for personal financial or sensitive information
  • tries to scare you, or threatens to have you arrested or to report you to a law enforcement agency.

You can report problems you with a real or fake debt collector to your state Attorney General, the Federal Trade Commission, and the Consumer Financial Protection Bureau.

Hi just got served with paper from a firm called Suttell, Hammer and White APC claiming to represent Discover card. They are suing me for an old credit card debt, but when I checked on the case number my hearing date is TWO years from now! and their own so called summons did not have any of that information. What should I do?

If you have an old debt, a collector may not be able to sue you to collect on it. Debt collectors have a limited number of years — known as the statute of limitations — to sue you to collect. After that, your unpaid debt is considered "time-barred." According to the law, a debt collector cannot sue you for not paying a debt that's time-barred. This FTC article has more about time-barred debts.

If a legitimate debt collector files a lawsuit against you to collect a legimate debt, you should respond to the lawsuit, either yourself or by having your lawyer respond. To preserve your rights, respond by the date shown in the court papers.

If you want to find a lawyer in your area, you can use this state-by-state list from the American Bar Association or visit this site from the State Bar Associations.

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