Judson’s Guide to Debt Collection Rights, Part II: Debt Collectors Cannot Lie to You – Alabama Consumer Credit Attorney Judson E Crump

The Second Right: Honesty

The second right you have when dealing with debt collectors is to hear the truth.  And nothing else.  This right is enshrined in 15 U.S.C. Sec. 1692e, which says “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.”

Sounds pretty clear, right?  Well, as usual, the “truth” can sometimes be hard to define, so both the statute and the case law takes the analysis a step further and specifies all sorts of collection activities that have been found to be illegal.  Without a doubt, this is the single most often violated aspect of the FDCPA.  Why?  Because if debt collectors told the truth, the whole truth, and only the truth, the typical collection call would sound something like this: “Hello, my name is John and I’m calling from NCEP, LLC about an account you previously may have had with CitiFinancial.  We purchased this account for 5% of the face value, and we don’t have any documentation to prove the debt, but most consumers are scared of the legal system and completely unaware of their rights, so we make a lot of money by scaring folks like you into paying us money to make this go away.  That said, we’d like to ask you to politely pay us some money.  Please?”

The truth is dull and extremely disarming.  So they withhold most of what they know about the debt, and instead focus on alarming buzzwords that are statistically likely to scare the average citizen into paying some money.  Words like “lawsuit,” “court proceeding,” “wage garnishments,” “seizures,” and “legal action.”

Not surprisingly, they often say things which, at best, are suggestions bearing a twisted relation to reality, and at worst, are outright lies.

Here are some examples of the more common lies that debt collectors tell:

– Amount Owed.  They cannot lie about the amount, legal status, or character of the debt.  This means they cannot claim you owe more than you actually do – even by a penny!  They cannot say they have a lien on your home or vehicle if they do not.  They cannot say that the debt is a judgment if it is not.

– Identity.  They cannot lie about who they are.  They must disclose the name of their corporation.  Some collection scammers will use a made up name or will give you some quick abbreviation like “NCC” and then start talking really fast in a very threatening manner.  They can’t do that.  If they don’t have a physical address, they are not real.  A debt collector cannot pretend that it is a law firm, a government agency, the original creditor, or anything else besides exactly what it is.

– False threats.  They cannot say they are going to sue you if they aren’t.  If they say, “You have 5 days to pay us or we’ll take you to court,” and they don’t actually take you to court after 5 days pass, then they have broken the law.  They cannot threaten to garnish your wages unless they already have a judgment.  They cannot threaten to tell your family, to tell your boss, to report to the credit bureaus as a condition of payment.  They cannot tell you that they’ve been authorized to settle for no less than $5,000 if they’ve actually been authorized to settle for $3,000.  These rules apply to law firms as well – so if you’re dealing with a collection lawyer, they have to follow the law as well.

– False Credit Reporting.  A debt collector cannot report false information to a credit bureau.  So for instance, if a debt collector is asking you for $1,200 on a debt that you paid down to $900, and they are reporting a balance owed of $1,200 to the credit reporting agencies, then they are breaking the law in two ways: by asking you for more than you owe and by reporting false information to the credit bureaus.

– False Accusations.  A collection agency cannot accuse you of committing a crime.  They cannot say that you will go to jail if you don’t pay.  You cannot go to jail for not paying a debt.  Period.

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