People in New Jersey who receive notice of a debt should know how to recognize the signs that a collection agency is acting illegally.
There are laws in place that govern the way debt collection agencies are permitted to practice. Recently, medical debt collector Syndicated Office Systems, LLC, broke those laws when it did not send notices of debt validation in a timely fashion to almost 10,000 people and mishandled credit reporting disputes for more than 13,000 people. According to the Consumerist, the company will have to repay $5.4 million to consumers who were adversely affected.
People who recognize the signs that a debt collector is employing illegal practices are better equipped to protect their financial futures. There are several ways these companies may try to cheat the system and these include failure to notify, using crude tactics and making illegal contact.
Failure to notify a debtor
Under the Fair Debt Collection Practices Act, any collection agency must notify a consumer in writing within five days of the initial contact. That notice must include how much is owed and the creditor owed the payments as well as statements that outline the following:
- That the recipient has 30 days to dispute the debt
- That if the recipient disputes the debt in writing, the collector will verify it or obtain a copy of a judgment
- That if the recipient requests it in writing, the collection agency will provide the name and address of the original creditor
When consumers dispute a debt, the collection agency must cease any kind of collection efforts until the debt is verified.
Using crude tactics
Debt collectors are not permitted to harass consumers through threatening them with violence. Under the Fair Debt Collection Practices Act, collection agents may not repeatedly call a consumer or use foul language when speaking with a consumer.
Some collection agencies may try to scare a debtor into making a payment. For example, a debt collector could tell a consumer that failing to pay is a crime or that the amount owed is much higher than it is. Making false statements such as these or misrepresenting who they are - such as claiming to be an attorney - violates collection laws.
Making illegal contact
Once a debtor hires an attorney, a collection agency is required to contact the lawyer, not the consumer. When consumers do not have an attorney, the New Jersey Division of Consumer Affairs notes that collection agencies are not permitted to contact people before 8 a.m. or after 9 p.m. Further, when consumers tell or write a collector to stop calling them at work, the agency is not permitted to continue to do so.
When debt collectors break the law
The New Jersey Division of Consumer Affairs urges people not to ignore notifications of debt, even if they do not believe they owe it. Under the Fair Debt Collection Practices Act, failure to dispute a debt after 30 days of the notification is considered an admission of liability. Therefore, people should always put a letter in writing to the collection agency to dispute the debt.
When debt collectors engage in illegal behaviors such as making false statements or cashing a postdated check early, people should contact the New Jersey Division of Consumer Affairs and the Federal Trade Commission. People with concerns regarding their financial affairs should get in touch with a bankruptcy attorney.