The Ultimate Weapon Against DEBT COLLECTORS Presented by Linda MartinezSales Director/Certified Credit Consultant
Topics To Be Discussed WHAT IS THE FAIR DEBT COLLECTIONS PRACTICES ACT (FDCPA) WHO ENFORCES THE FDCPA? WHAT TYPES OF DEBTS ARE COVERED BY FDCPA? GLOSSARY OF TERMS COMMUNCATION WITH 3RD PARTIES WHAT ARE YOUR CONSUMER RIGHTS? HOW TO STOP COLLECTION CALLS 15 FDCPA COLLECTION VIOLATIONS SOLUTION!!!
WHAT IS THE FAIR DEBT COLLECTIONS PRACTICES ACT? The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., is a United States statute added in 1978 as Title VIII of the Consumer Credit Protection Act. Its purposes are to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the informations accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. It is sometimes used in conjunction with the Fair Credit Reporting Act.
WHO ENFORCES THE FDCPA? The Federal Trade Commission oversees the collections industry, and has the authority to impose fines or other penalties for violations. However, the FTC does NOT get involved with individual consumers’ cases. They accept a large number of complaints, and look for patterns of violations which could then lead to action against a particular collection agency.
WHAT TYPES OF DEBTS ARE COVERED BY FDCPA? The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.
CreditorAny person who offers or extends creditcreating a debt or to whom a debt is owed, butsuch term does not include any person to theextent that he receives an assignment ortransfer of a debt in default solely for thepurpose of facilitating collection of such debtfor another.
DebtAny obligation or alleged obligation of aconsumer to pay money arising out of atransaction in which the money, property,insurance or services which are the subject ofthe transaction are primarily for personal,family, or household purposes, whether or notsuch obligation has been reduced to judgment.
Debt CollectorAny person who uses any instrumentality ofinterstate commerce or the mails in anybusiness the principal purposes of which is thecollection of any debts, or who regularlycollects or attempts to collect, directly orindirectly, debts owed or due or asserted to beowed or due another.
COLLECTION AGENCY(1) Some creditors will actually use a separate companyname, address, and phone number for their internalcollection departments, in order to give the impression of an“outside” agency. This strategy is generally only used whenthe debt is recent (under six months delinquent). (2) Mostcollection activities are performed by a third-party collectionagency, which are separate from the original creditors, and“work” debts on behalf of various lenders. They may alsobuy bad debts which have been designated as “charge-offs”by the original creditor.
Purchased Debt Some agencies also purchase large groups of charged-off debts for a small percentage of the “face value” (amount owed.) After a debt is sold, the debtor now owes the full amount of the purchase. Since the chances of recovery decrease substantially with time, an agency might only pay 1% - 5% of face value. The agencies’ profits come from the difference between the purchase price and the amounts that are eventually collected. Once the debt is purchased by a collection agency, the debtor will no longer be able to make any negotiations with the original creditor. Due to this reason a collection agency may file a lawsuit against the debtor. However, the Federal Trade Commission has issued a STAFF OPINION LETTER which indicates that, even if a collection agency purchased a debt, it is STILL covered under the Fair Debt Collection Practices Act as a “third-party debt collector.
Reporting to Credit Bureaus Third-party collection agencies may report a debt to one or more of the credit bureaus, as a “Collection Account,” including the amount, and whether it was paid or not. Paying off a collection account will NOT result in the item being removed from the consumer’s credit reports – it will simply be marked “PAID.” Agencies can report both debts that they have bought, and also debts they are working on behalf of the actual creditor. Also, a collection agency may request a debtor’s credit report, in order to get an idea of his/her general financial situation, and to get updated address and phone numbers.
Statute of Limitations The debt does NOT become “new” just because it was sold. Example the seven-year credit reporting time limit is still based on the ORIGINAL DELIQUENCY DATE with the ORIGINAL CREDITOR. The statute of limitations for filing lawsuits is also based on that same date. These limits cannot be legitimately “reset” by a collection agency that has bought the debt. However, the statute of limitations MAY possibly be reset if the debtor makes a specific promise to pay or makes a general payment. This can reinstate the debt for another 6 years pending on the state laws.
How Does A Debt Collector Obtain Personal Information A person can be traced via Google, Yellow/White pages, Assessors website, Facebook, contacting family/neighbors, Department of Motor Vehicle records (License Plate#), court records ( public records), written check, CBR’s and other skip tracing tools.
Can A Debt Collector Contact You Any time Or Place NO! A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agreed to it. Collectors may not contact you at work if they are told (orally or in writing) that you’re not allowed to get calls there.
Can A Debt Collector Garnish Your Bank Account Or Wages If you do not pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you The judgment states that amount of money you owe, including but not limited to attorney fees, costs and interest and allows the creditor or debt collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt. Any account that is attached to you can get garnished such as banking and savings accounts.
COMMUNICATION WITH THIRD PARTIES Under the Fair Debt Collection Practices Act (FDCPA) discussions about the debt can only be held with (1) the individual, (2) the creditor, (3) an attorney representing one of the parties, and (4) a credit bureau. Public airing of your business intended to shame you into paying a debt is not allowed. This is a violation of the FDCPA.
YOUR CONSUMER RIGHTS? HOW TO VALIDATE YOUR “SO CALLED” DEBT EXPLAIN TO ME THE MONEY YOU SAY I OWE SHOW ME A BREAKDOWN OF WHAT YOU SAY I OWE PROVIDE ME WITH COPIES OF PAPER WORK SHOWING I AGREED TO PAY YOU WHAT YOU SAY I OWE PROVIDE ME WITH THE NAME AND THE ADDRESS OF THE ORIGINAL CREDITOR PROVE TO ME THE STATUTE OF LIMITATIONS HAS NOT EXPIRED ON THIS ACCOUNT SHOW ME A COPY OF YOUR LICENSE TO COLLECT IN MY STATECONTACT ME FOR YOUR “VALIDATION OF DEBT LETTER”
HOW TO STOP COLLECTION CALLS Make written request for the collector to cease communication. They can only contact you one more time, via mail to let you know one of the following; that further efforts to collect the debt are terminated, that certain actions may be taken by the collector, or that the collector is definitely going to take certain actions. [15 USC 1692c] 805 (c) Contact me for your Cease and Desist Letter
15 FDCPA VIOLATIONS HELPFUL TIPS1. Ask you to pay more than you owe The collector cannot misrepresent the amount you owe. [15 USC 1692e] (2)(a)2. Ask you to pay interest, fees, or expenses that are not allowed by law. The collector can’t add on any extra fees that your original or loan agreement doesn’t allow. [15 USC 1692f] 808 (1)3. Call repeatedly or continuously The FDCPA considers repeat calls as harassment. [15 USC 1692d] 806 (5)
Violations con’t…4. Use obscene, profane, or abusive language. Using this kind of language is considered harassment. [15 USC 1692d] 806 (2)5. Call before 8:00 am or after 9:00 pm. Calls during these times are considered harassment. [15 USC 1692c] 805(a)(1)6. Call at times the collector knew or should know are inconvenient. Calls at these times are considered harassment. [15 USC 1692c] 805(a)(1)
Violations con’t…7. Use or threaten to use violence if you don’t pay the debt. Collectors can’t threaten violence against you. [15 USC 1692d] 806(1)8. Threaten action they cannot or will not take. Collectors can’t threaten to sue or file charges against you, garnish wages, take property, cause job loss, or ruin your credit when the collector cannot or does not intend to take the action. [15 USC 1692e] (5)9. Illegally inform a third party about your alleged debt. [15 USC 1692c] 805(b)Unless you have expressly given permission, collectors are not allowed to inform anyone about your debt except: ∙your attorney ∙the creditor ∙the creditor’s attorney ∙a credit reporting agency ∙your parent (if you are a minor)
Violations con’t10. Repeatedly call a third party to get your location information. The collector can only contact a third party once unless it has been reason to believe the information previously provided is false. [15 USC 1692b] 804(1)11. Contact you at work knowing your employer doesn’t approve. A collector is not allowed to contact you at work if you’ve let them know your employer doesn’t approve of these calls. [15 USC 1692c] 805(a)(3)12. Fail to send a written debt validation notice. Within five days of the collector’s initial communication, they must send you a notice including the amount of the debt, name of the creditor, and notice of your right to dispute the debt within 30 days. [15 USC 1692g] 809(a
Violations con’t…13. Ignore your written request to verify the debt and continue to collect. A collector can’t continue to collect on a debt after you’ve made a written request to verify the debt as long as the request was made within 30 days of the collector’s written notice. [ 15 USC 1692g] 809(b)14. Continue to collect on a debt before providing verification. After receiving your written dispute, the collector must top collecting on the debt until you have received verification. [15 USC 1692g] 809(b)15. Continue collection attempts after receiving a cease communication notice. If you make a written request for the collector to cease communication, it can only contact you one more time, via mail to let you know one of the following; that further efforts to collect the debt are terminated, that certain actions may be taken by the collector, or that the collector is definitely going to take certain actions. [15 USC 1692c] 805 (c)
Can Federal Benefits Be Garnished? NOT usually! Many federal benefits that are exempt from garnishments include: Social Security Supplemental Security Income (SSI) Benefits Veteran Benefits Civil Service and Federal Retirement and Disability Benefits Service Member’s Pay Military Annuities and Survivors’ Benefits Student Assistance Railroad Retirement Benefits Merchant Seamen Wages Longshoremens and Harbor Workers’ Death and Disability Benefits Foreign Service Retirement and Disability Benefits Compensation for Injury, Death, or Detention of Employees of U.S. contractors outside the U.S. Federal Emergency Management Agency Federal Disaster Assistance Federal Benefits may be garnished under certain circumstances, including : Paying delinquent taxes, alimony, child support or student loans.
Dealing with a debt collector… Can be one of lifes most stressful experiences. Harassing calls, threats, and use of obscene language can drive you to the edge. Whats worse, a collector may embarrass you by contacting your employer, family or neighbors. You may even be hounded to pay a debt that is not rightfully yours. Sure, collection agencies have a job to do. Even so, there are limits on how far a debt collector can go!!! “LEARN THE GAME AND WIN!”
To Know And Not To Do… Is Not To Know… And Now YOU Know! Leo Buscaglia
“Protecting One Family At A Time” Linda Martinez 562.754.3961Go to: www.QueenOfCreditRepair.com for your Free Ebook https://www.facebook.com/LindaMartinez.QueenOfCreditRepair.FES Linda@FinancialHealthQueen.com
Video 1-"What YOU Need To Know Before YOU "FIX" Your Credit"! Video 2 - "The Ultimate Weapon Against Debt Collectors“! Video 3 -" A Role For Agents In The Credit Crisis“! Presented by Linda Martinez FES Sales Director/Certified Credit Consultant