6 Commons Violations in Credit Card Debt Collections
Debt collection agency does the dirty works for the original creditor – your credit card company – and for the junk debt investors who buy credit card debts from the banks. Certain collection agencies are part of bigger credit card companies which also include a collection law firm and a junk debt buyer.
All debt collectors are regulated by the FDCPA (Fair Debt Collection Practices Act). Most states have their own FDCPA version. Additionally, most states require that debt collectors be licensed to contact borrowers to collect debts. Debt collectors may violate FDCPA; these violations can cause law suits by victimized borrowers and/or their lawyers.
Debt collectors attempting to collect credit card debts sometimes violate the FDCPA. There are some of their common violations.
1. They threaten to have your wage garnished. However, it can’t happen without a court order on wage garnishing. In a few state, wages can’t be garnished.
2. They threaten to call the authorities and have you arrested. Luckily, bad debts aren’t a criminal matter.
3. They threaten to seize your savings account. Again, that can’t happen without a court procedure. It is violation of the FDCPA and subject to a $1000 award.
4. If you’ve been making monthly payments to a debt collector, your payment records can get lost or the collection agency you were working with has stopped their partnership with your credit card company. In any event, the new collection agency may insist you still owe the original amount, perhaps more.
5. They add their own interest and fees to your balance to inflate the debt amount to get more profit out of you.
6. They call your employer, your relatives, or your neighbors to collect on the alleged debts; this is a direct violation of the FDCPA.
By learning about common FDCPA violations, consumers can use their knowledge to defeat and frustrate bad debt collectors. Debt collectors are often aggressive in demanding payments. If the consumer can’t make the payment, their last chance is often to immediately file a lawsuit before the expiration of your debt.