Most people know that now the collectors cannot harass any debtor as they did in the olden days as a common debt collection practice. No matter how big a debt you carry or no matter how dire your financial situation is, debtor harassment is an absolute no-no in modern debt collection methods. However, what most of the debtors do not know is that there is lot more into the federal law that governs debt collection agencies especially their collection methods.
Debt collectors cannot lie to the debtors about the outstanding debt amount or even about their identity. They cannot pose as an official from the law enforcement or as a certified attorney as well. Apart from that, they cannot make any false promises and guarantee anything that is beyond the peripheries of their operation.
In short, they must abide by the guidelines laid by the state and federal government and abstain from any actions or practices that may be deemed unfair and harassing to the debtor in the eyes of law.
Complaints for malpractice
Just as in any other aspect of the judicial system nothing seems to be foolproof and absolute in debt collection practice as well.
There are still complaints about unfair practices and malpractices by the debt collectors made by the debtors to the FDCPA. Debt collectors still follow the harsh and hard collection processes.
There are few alarming instances of medical debt collection practices that came to light early in 2012. These instances revealed that most of the major debt collection companies engage representatives working on their behalf in different hospitals and emergency rooms. Their job is to collect payments from the patients for those treatments they are yet to receive.
There are several other instances where the officials found that these debt collectors broke the law regularly in a few ways such as:
These and several other complaints against the debt collectors by the debtors have raised doubts and put on a few question marks on the designing and implementation, enforcement and practice of the federal laws to regulate debt collection processes.
Results and consequences
As a result of these practices the three major credit reporting bureaus namely Experian, Trans-Union and Equifax is convinced that there is an immediate need to make some alterations in the law for the benefit of the innocent and victimized patients.
This act saw a significant change and addition in it in the year 2010 when the FTC included regulatory measures to control the harsh operational procedures of the debt settlement companies. One of the most significant parts of the amendment that provided a considerable relief to the debtors is the ban on advance fees demanded by these debt collection agencies.
The amended TSR
The TSR after amendments is very strict about the fees collected by the debt collection and even by the debt settlement companies. According to the inclusions in the amended TSR it is specified clearly that a debt collection agency is not eligible or legally allowed to collect fees from the debtors until and unless one or all of the following conditions are fulfilled:
Apart from all these requirements, there is an exemption made by FTC in the TSR that disallows the debt relief provider from meeting a client face-to-face. Surprisingly, even after so many amendments and strict enforcement of the laws, very few debt settlement companies are found to comply with the ban on advance fees. In order to bypass the restrictions and continue charge advance fees from their clients these companies usually send an agent on their behalf to perform an in person signing agent with the consumer.
It is therefore recommended that you consult a consumer law attorney to deal with the complicated legal issue and to analyze your precise situation and facts.
Member since: 30th January 2018
Mandy Bular is a freelance content writer. She has written many good and informative articles on different categories such as technology, health, fashion, education, career, travel etc. She is a featured...