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Laws Protecting Consumers From Creditor Harassment

For most people, debt is just a fact of life. But unfortunately, many people have debts in collection, which usually means a third party is trying to collect payment for your debts on behalf of your creditor. For example, 23% of consumers in California have some type of debt in collections.

Creditor harassment can take many forms. If a debt collector is demanding payment, you may be frightened, troubled, or unsure how to respond. If you receive a notice from a debt collector, you should respond as soon as possible. Even if you believe you do not owe the debt, if you fail to respond, the collector may continue to pursue you, damage your credit, or sue you. If you do not respond to a lawsuit, the debt collector may seek a default judgment against you. However, there are laws protecting consumers from creditor harassment.

What is harassment?

According to the California Department of Justice, debt collectors cannot make false or misleading statements. In addition, they cannot "swear, threaten to illegally harm you or your property," misrepresent themselves or take other illegal actions.

They cannot repeatedly call to harass or intimidate you, such as calling at inconvenient or unusual times or places. They may call between 8 a.m. and 9 p.m. unless you have asked them not to call during specific times.

Notices or letters from debt collectors cannot display information about your debt on the envelope.

You can place limits on how the debt collector contacts you. You should make these requests in writing, by certified mail, and keep a copy. However, if you ask a debt collector to stop contacting you entirely, it may still report your debt to credit reporting agencies and sue you.

Federal laws regarding debt collection

The Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §§ 1692 and following) is a federal law that regulates debt collection. It applies only to third-party collectors such as collection agencies and debt buyers, not original creditors. Therefore, if a credit card company is pursuing payment on an overdue account, the law would not apply. Still, it would apply if the credit card company hired a collection agency to collect on its behalf. The FDCPA prohibits debt collectors from a variety of deceptive tactics and regulates the ways debt collectors can contact you, such as:

  • Forbidding debt collectors from engaging in a wide variety of misleading behaviors
  • Debt collectors may not use obscene or threatening language when attempting to collect a debt
  • Debt collectors may not threaten actions they do not intend to take
  • Restricting the number and times of calls
  • Debt collectors may not pursue a collection on a disputed debt
  • The debt collector must provide certain information when communicating with the consumer
  • Debt collectors may not contact third parties, including employers and family members
  • Restricting the information provided on the outside of an envelope or other visible locations
  • Debt collectors may not use emblems or other symbols that leave a misleading impression that they are from law enforcement or a government entity

The Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB) was created to help enforce federal consumer financial laws. In the period between 2017 and 2018, 37,711 California consumers reported debt collection-related complaints to the Consumer Financial Protection Bureau. 49% of those complaints concerned attempts to collect a debt the consumer alleged they did not owe because the debt was not theirs, a result of identity theft or the debt was paid or discharged in bankruptcy. Other complaints focused on insufficient written notification of the debt. Also, some creditors took or threatened to take legal action, including threats of arrest and jail, deportation, or collection from protected funds such as child support. Other collectors falsely impersonated law enforcement officers or government representatives, contacted employers or other third parties about the debt, or made repeated calls.

California's debt collection law

The primary debt collection law in California is the Rosenthal Fair Debt Collection Practices Act. The legislature passed the law to address false and unfair collection practices. It is substantially similar to the Fair Debt Collection Practices Act. The primary difference between the Rosenthal Act and the federal Fair Debt Collection Practices Act is that the Rosenthal Act is broader and applies to original creditors in addition to third-party collectors. It also applies to anyone who makes and sells materials such as forms and templates used in debt collection.

It is essential to know your rights when a creditor calls. If creditors are harassing, consult an experienced attorney. For more information or a free consultation, call 310-626-4404 or contact us online.