Find the Collection Agency Violations

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The Fair Debt Collection Practices Act, FDCPA, has very strict guidelines as to what debt collectors can and can not do when attempting to collect on a debt. Collection agencies will try all kinds of underhanded tricks to get you to pay a debt — which might not sound great if you are trying to rebuild your credit. You might also be contacted by a debt collector regarding a friend or family member’s debt. It is imperative you know your rights and you are aware of actions these bottom feeders might try that are illegal and could get them sued.

Find the FDCPA Violations

So, we are going to play a little game called “Find the Collection Agency Violations.” A year or so ago, a reader posted this on our discussion boards. It is a transcript of a phone call that contained numerous violations made by a collection agency during the phone call.

Can you spot the violations? Now don’t cheat as the answers are given below. This exercise will help you to identify collection agency practices and what to look for during a call. It may also help you to get rid of a collection.

“I got a call on my wife’s phone tonight from CBE or something of that sort. I know she still has some credit issues coming out of the woodwork, so I started the tape recorder up and answered the phone.

Mike was the rep’s name and he asked for my wife. I told him she wasn’t there – she was at the store. He asked for her by her maiden name and then ask if I was Mr. Maiden name. I said “No.” He then proceeded to ask when was a good time to get a hold of her. I said I don’t know but if you leave your information I’ll give it to her. He said, “OK, well my name is Mike and I’m with CBE and our number is 800-XXX-XXXX.” I said, “Hey Mike, so can I tell her what this is pertaining to?” Mike said, “Yeah, it’s about a hospital bill that is now in collections and I need to speak with her about paying it.” I said, “Really? Well how much does she owe you?” Mike continued, like nothing was wrong, “One hundred-fourteen dollars and it is from February 2008, when she had XXXXXX performed.”

I know we had already paid this because we had issues with the insurance and the double coverage she had at the time so I say, “You guys have all that information right in front of you……I’m impressed!” And he goes on to say, “Yeah, they give us everything we need to track these kind of people down. A lot try to hide from us but we can find them.” At this point I’m think it’s time to let Mike in on my little secret. So I say, “Hey Mikey, do you know how I know (wifey)?”. He says, “No.” And I say, “Well why hasn’t your company ever sent her a letter?” Now I think Mikey is getting worried because he starts to sound really confused. He says, “Well, we don’t have her address.” And I say, “So you are collecting for XXXXX hospital and I know they have her address, so why didn’t they give it to you?” Mikey isn’t full of a lot of answers right now so I explain that I have just recorded the whole conversation and then he gets a little mad. I guess he thought we were friends. He tells me that I illegally taped the conversation and if I don’t destroy it that I’ll go to prison. I casually explain how Iowa (where I live) and Nebraska (his state) are both one party consent states and that the recording is perfectly legal. Then I explain the damage he has done.

Well, after giving Mikey the once over about his illegal practices (citing the FDCPA and Iowa laws) and how I think people who try to collect and use illegal tactics are scumbags, Mikey starts to bargain with me. Yes – he actually starts to ask me what he can do for me. He starts offering to settle for $10.00 as long as I don’t tell anyone about this conversation (I am still recording Mikey, by the way). He says he can get the account deleted from their system and I won’t have to pay a dime. I tell him, “No thanks – violations are worth a lot more than $114.00.” He starts to get this attitude like I should help him out or something. I decide to end the fun and I tell him that he should get a different job because I wouldn’t be surprised if he was held personally responsible for the law suit. And then I say, “Well I’m gonna go now…..Oh and by the way, we already paid that bill so maybe you should look into that.” He says, “Oh,” and then I say goodbye.”

What Violations Were Made By The Collection Agency?

  1. The Collector Gave Out Information About The Collection to a Third Party.  It’s not OK for a collection agency to call a co-worker, neighbor, or family member and ask them for contact information. The collector started out properly, but when prompted, easily gave out private information. This is a violation of The Fair Debt Collection Practices Act:

    804. Acquisition of location information [15 USC 1692b]

    Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall —

    (2) not state that such consumer owes any debt;

  2. Tried to Collect on a Debt Which was Already Paid.  This is definitely misrepresentation of the debt. The violation of the FDCPA:

    807. False or misleading representations [15 USC 1962e]

    (2) The false representation of —
    (A) the character, amount, or legal status of any debt; or

  3. Threatened to Sue if the Consumer Did Not Destroy the Tape.  It was perfectly legal for the consumer to tape the conversation, as both the states were one-party states. One party means that a phone conversation can be taped as long as one of the participants gives permission and that can be the person taping and participating in the conversation. All but 12 states in the U.S. are one-party states. So the violation of the Fair Debt Collection was:

    807. False or misleading representations [15 USC 1962e]
    (5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

  4. Tried to Bribe The Consumer.  The collector suggested that he would pay $10 if the consumer would not report his illegal actions. I don’t know about you, but this sounds like bribery to me. Definitely illegal. This would be a violation of the Fair Debt Collection Practices Act:

    807. False or misleading representations [15 USC 1962e]

    (2) The false representation of —
    (B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

Actions Against the Collection Agency

Now that you saw the violations committed by that particular debt collector, what actions could that consumer have taken against the collector? The consumer could take the collection agency to court and win on violations of the Fair Debt Collection Practices Act. Armed with the taped conversation, it would be a slam-dunk. The best result, though, was that the consumer got rid of the collection agency and ensured that he and his wife would no longer be bothered.

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