Illegal Debt Collection Practices

Abusive collection practices contribute to bankruptcies, marital instability, job loss, and invasion of privacy.  These effects end up affecting commerce.

The laws are intended to remedy that situation.  They protect consumers from abuse by requiring that non-abusive debt collection practices are used.  They apply to the collection of personal, family, and household debt.

What laws protect you?

Federal Fair Debt Collection Practices Act (“FDCPA”), 15 USC 1692

Your state’s Occupational Code:  Michigan law can be found at MCL 339.901 et. seq.

Your state’s Regulation of Collection Practices:  Michigan law can be found at MCL 445.251 et. seq.

Illegal debt collection practices: 

Illegal = False, Deceptive, Misleading, Unfair or Unconscionable

A list of prohibited practices can be found at 15 USC 1692, MCL 339.915, MCL 339.915a, and MCL 445.252.

Who can debt collectors talk to when collecting?  Only YOU!

Collectors may only speak with the you about the debt unless they are trying to find you.

** They can only confirm or correct the location information they have about you.

They can’t write you a post card or mark an envelope to look like it relates to the collection of a debt.

When can debt collectors call you?  

  • Between 8:00 am and 9:00 pm
  • Not at an unusual time or place
  • Not at your employment if they should know your employer prohibits it

What debt collectors MUST do:  

Within five days after their initial communication with you, send you a written notice stating:

  • Amount of debt
  • Name of creditor
  • Unless you dispute the debt within 30 days, it will be considered valid by the collector
  • If you dispute the debt within 30 days, the collector will obtain verification of the debt and mail it to you
  • If you provide a written request within 30 days, the collector will give you the name and address of the original creditor

If you dispute the debt or request the name and address of the original creditor, within 30 days, the collector must STOP collecting.  The collector cannot resume collection until they verify the debt and send it to you.

End all communication by writing to the collector that you refuse to pay or want them to stop.  Their only move is to terminate their efforts or sue and they are allowed to write to let you know which one.

Go after debt collectors for statutory damages!  Sue and come out ahead!

The laws MCL 339.916, § 813 Civil liability [15 USC 1692k] provide for:

  • Reasonable attorney fees
  • Expenses
  • Actual damages
  • Additional damages
  • Statutory  damages

You do not have to do it alone.  Attorneys will love to help because their fee is written into the law.

Does the debt collector have a defense? 

Yes, it’s the bona fide error defense and it’s hard for them to prove in most cases!  Woo woo!

Bona fide error = no intent + procedures were in place to prevent the error

WHAT MUST YOU DO TO WIN YOUR CASE?

Write to the debt collector — “certified mail” or “return receipt requested”.  Tell them:

You dispute the debt and that they are not allowed to contact you.

OR

How and when they are allowed to communicate with you.

Keep a log.

Document the name of the person, date, time, and what was said.

Each communication can amount to money in your pocket.

If you need more information or help with your particular situation, contact me directly at lawref@lawrefs.com.

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