Several months ago, I posted a blog on the steps you “should” take in order to effectively collect money that a client or customer owes to you or your company.
In today’s blog, I want to provide you with collection steps you should “not” take in an attempt to collect on a debt. Creditors, collection agencies, and even attorneys can be held liable for abusive collection practices under both federal and state law. Here are a few examples of steps you should avoid taking when attempting to collect on a debt:
1. You may not directly communicate with a consumer to collect on a debt if you know the consumer is represented by an attorney.
2. You may not communicate with a consumer at an unusual time or place. Communications between the hours of 9:00 p.m. and 8:00 a.m. are presumed to be unusual and inconvenient.
3. You may not communicate with a consumer at his or her workplace if you know or should know that the employer prohibits such communications.
4. Generally, you may not communicate with third parties regarding the consumer’s debt (with some exceptions, such as the parties’ attorneys or a credit reporting agency).
5. Even leaving voice-mails that are likely to be overheard by third parties could be considered to be a violation of federal debt collection law.
6. If you communicate with a third party to try to find out the debtor’s location, you must identify yourself and state that the purpose is to try to find the location of the consumer, but you may not state that you are attempting to collect on a debt. You also may only identify your employer if expressly requested.
7. You may not threaten or harass a consumer to collect on a debt. Examples of this include:
a. Implied threats of violence, e.g., “We are not playing around here – we can play tough.”
b. Publishing a “dead beat” list anywhere of, e.g., people who wrote you bad checks.
c. Continuously or repeatedly calling a consumer with the intent to harass (e.g., calling a person more than five times a day after being told not to call again).
8. You may not fail to disclose your identity or mislead the consumer about the nature and purpose of your call.
9. You may not make any false or misleading statements to try to strong-arm a consumer into paying the debt (i.e. falsely stating that you will garnish his wages if he does not pay).
These actions may violate the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. and/or California’s Rosenthal Fair Debt Collection Practices Act, California Civil Code § 1788 et seq.
The debt collection attorneys in California at Reid & Hellyer have extensive experience in the debt collection process. Contact us if you can use some assistance with your collections.