Friday, January 14, 2011

Can Bill Collectors Call Your Family?

Can Bill Collectors Call Your Family? 

Owing a collection agency is stressful enough. Having to share that fact with your loved ones is infinitely worse. Your debt, and whether or not you pay it, is your own business.

In the interests of collecting a debt, however, bill collectors may threaten to call your family members and inform them of your situation. Perhaps the threat comes veiled in kindness as a "let me take care of this for you" option. More than likely it comes as part of a sneering, vicious crusade to frighten you into making a payment – especially if the statute of limitations has already expired on the debt. Either way, its illegal.

Debt Collectors Can't Tell Your Family About Your Debt

A debt collector cannot legally share any details about your debt with your family members. Technically, collection agencies can call your friends and loved ones, but only in an effort to locate you. The company clearly already knows how to get in touch with you if a collection agent threatens to call your family. Ironically, this bars the company from ever legally doing so. 

Collection Agency Contact With Family Members

The Fair Debt Collection Practices Act expressly states that, in the event a collection agency cannot locate a debtor, the collection agency may contact friends, family and the debtor's employer in an effort to locate him or her. When doing so, however, debt collectors must take the utmost care not to give out any information that would lead the individual to believe that the person they are looking for owes a debt.

The FDCPA goes so far as to bar collection agencies from putting their company name on any written communication with the debtor if the company name reflects the fact that the organization is responsible for collecting unpaid debts. Federal law takes your privacy very seriously...even if the bill collectors don't. 

While a bill collector can technically call your family members, it can only do so once unless the company has clear reason to believe that the individual is hiding information. Here's the tricky part: the debt collector can only disclose his place of employment if your loved one insists that he do so in order to provide the information required to locate you. A bill collector cannot disclose the reason for his call.

Telling Your Family About Your Debt is Illegal

Let's face it, when you're already knee deep in debt, the last thing you need is your parents giving you a lecture as if you were an irresponsible teenager. And do you really want your sister having that information to hold over your head or disclose to everyone you know when she has a bit too much to drink next Christmas? No. 

You don't need a lecture about debt and responsibility.

So when a debt collector threatens to call your family and tell them about your debt, even if that threat is disguised as a kind offer, be sure to inform the collector that doing so would be against federal law and you have every intention of exercising your right to legal recourse.

It's Illegal for Debt Collectors to Threaten to Call Your Family

If you really want to play hardball, try this on for size: Not only is it illegal to actually call your family members and tell them about your debt, its also illegal for a bill collector to threaten to do so. Debt collectors can only threaten to take action that they actually have the legal right to take. Since they don't have the legal right to tell your family anything about you or your debt, they can't legally threaten to make the call.

So if you're really feeling froggy and a frustrated collection agent threatens to give Mom and Dad a call, skip down to your local courthouse the next morning and start filing the paperwork for an FDCPA lawsuit. You have that right. 

Monday, January 10, 2011

The Partial Cease and Desist Letter

When you've had it with the constant ringing of your telephone and the daily messages from debt collectors insisting that you call at once to discuss an "important financial matter," the discovery that a written cease and desist order forces bill collectors to stop contacting you may seem like a gift from heaven.

But don't get too excited just yet.

Cease and Desist letters force collection agencies to stop contacting you.

When the debt collector cannot contact you, how can it possibly collect the debt? Is the company going to simply sigh and give up?  If your debt is insignificant to the company, that's certainly a possibility – but a lawsuit from the company is an equal possibility. Which brings us to the limited Cease and Desist letter.

The Partial Cease and Desist Letter

One supposed loophole to the "cease all contact" provision of the Fair Debt Collection Practices Act is the partial Cease and Desist letter. The partial Cease and Desist letter directs collection agencies to stop contacting you by telephone only. You're still leaving them the right to send you all the letters they please (time to invest in a paper shredder, perhaps?). The theory here is that, since the company still has a collection method at its disposal, your Cease and Desist letter won't trigger a lawsuit.

Unfortunately, the FDCPA only recognizes one type of Cease and Desist – the full cease communication order. Thus, if you have a collection agency that follows the letter of the law to a T (sure, it exists...its headed by the Easter Bunny and staffed with gnomes), the company will acknowledge your partial Cease and Desist as a full Cease and Desist and stop all contact – placing you at the same risk of a lawsuit you would have incurred by sending the full cease communication order.

Oh, the agony.

Making a Limited Cease and Desist Order Work

The FDCPA is a fun little document, full of fun little provisions. It's like a geometric proof...there are so many ways to work things in your favor. Fortunately for the little guy, the FDCPA gives us all one surefire way to make a limited Cease and Desist letter work: the word "inconvenient."

Lets take a look at it in its full glory, shall we?

805 (c) (1) A debt collector may not communicate with a consumer in connection with the collection of any debt at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.

When you sit down to type out the "Don't call me but don't sue me either" letter, make absolutely certain to use the word "inconvenient" when detailing why the company should not contact you via telephone. If you think this sounds petty, you couldn't be more correct, but invoking Section 805 of the FDCPA helps prevent your partial Cease and Desist letter from being misconstrued as a full cease communication order.