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Debt collection agencies that violate the FDCPA

Adam J Krohn / Posted: 2009-02-06 12:00 am
Collection agencies’ active participation in collecting debts from vulnerable U.S. debtors has increased in recent years. These agencies employ illegal means to collect debt from borrowers. With the rising numbers of complaints from the victims of these agencies, the federal government was moved to enact the Fair Debt Collection Practices Act to prevent creditor harassment. According to the FDCPA, debt collectors are forbidden from oppressive and unfair collection practices, using abusive language, threatening calls to the debtors, and others.

Here are some examples of how these collection agencies have violated the FDCPA.

The owner of Legal Action Recovery, a professional debt collection firm, violated the FDCPA when it threatened debtors to persuade them to pay off debts. However, at the time of the threats, these victims didn’t even owe the debts, which had been discharged in bankruptcy, and were beyond the statute of limitations in any event. The debt collectors even warned the debtors that the agency would take legal action if the payments are not made promptly. Going even further, the firm’s agents masqueraded as law enforcement officers to pressure the victims to pay the alleged debts.

The owner also tried to operate his firm from prison and corresponded with his staff regarding account management and personnel issues. He was always updated about his banking activities. As a result, the New York Attorney General’s Office lodged charges against the owner.

In another case, charges were filed against a Buffalo, NY collection agency operated by Tobias Boyland, known as Bags of Money, for creditor harassment. Boyland’s debt collectors violated state and federal law by masquerading as law enforcement officials. Most consumers thus gave in to the demands of the collection agency, as they were being threatened with arrest if they failed to make payments. The collection agency was also found to have sought payment for non-existent debts. The agency even tried to collect payments after the statute of limitations had passed, and overstated the amount owed on the actual debt. The company also provided incorrect contact information to make consumers believe that it was located far from the Buffalo area.

California’s Bad Check Diversion Act (BCDA) empowers a district lawyer to sign a contract with a private body to run a diversion program for bad-check writers. The company District Attorney Technical Services Inc. had an agreement with various district attorneys' offices to offer collection services to merchants who were given bad checks. The CEO of District Attorney Technical Services Inc.’s only source of income was its collection activities based on this contract. This firm, however, often collected fees that were not authorized by the BCDA. The company frequently threatened legal action and arrest warrants, but never bothered to present the files to the district attorney's office – conduct which violates the BCDA and the FDCPA.

Finally, Continental Central Credit (CCC) collected delinquent accounts for The Association for Maintenance Fees. CCC charges 40% on all debtors’ accounts after the money is retrieved from them. The collection agency sent second collection notices less than 30 days after sending the first notice, in violation of the FDCPA.

These four are just a few amongst the many debt collection agencies that have violated the FDCPA by using illegitimate and unfair debt collection practices. If you have been the victim of such practices, talk to a debt collection attorney. Your attorney can help to stop the harassment, and help you to obtain justice.
Tags : Fair Debt Collection Practices Act, Fdcpa

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