Collection agencies can be very aggressive in their “efforts” to collect debts on behalf of their clients or themselves. However, they cannot be abusive or use unlawful practices.
Fair Debt Collection Act protects debtors so that those entities collecting debts abide by this Act. This Act, if you look at in one way, is similar to the NJ Consumer Fraud Act which was set up to protect consumers against unlawful practices from contractors and others who try to deal unfairly.
Recently, the Federal Trade Commission sued a group of collection agencies and their OWNERS for not representing who they were when they contacted debtors.
When someone states that are calling from a company that has the words: Federal, American, U.S. or State, we expect that they are part of the government. Collection agencies were using these terms for their unlawful advantage to scare the debtors into making payments.
The collection agencies that are being sued have also used abusive, unfair, and deceptive tactics to pressure debtors to make immediate payments on “purported” debts. Many of the debts were being challenging by the debtors.
When a collection agency threatens you with serious consequences including arrest, you should report these agencies. Debtors have been told that they have committed check fraud or other criminal acts and could face jail time.
Now the unlawful practices are being dealt with and it is very possible that these collection agencies that collected millions of dollars in this unlawful manner will be paying their debts to society.
Also, remember, when you file for Bankruptcy, as soon as your Bankruptcy Petition is filed, creditors cannot contact you. If they do, they are breaking the law and you should notify your attorney immediately. Creditors you have listed on your petition automatically get notified and cannot contact you.