Illegal Collection Letters - What to look for

Debt collectors use a variety of techniques in order to collect debts that constitutes debt collection harassment. Some of these techniques are legal, some are not and others simply reference the word legal in order to intimidate consumers – even when a lawyer isn’t involved. A court recently ruled that this type of behavior is false representation and debt collectors cannot continue this practice.

Our “Legal Department” Says Pay Up!

Consumers who are behind on debt payments, or have defaulted on a debt, know all too well that debt collectors will do whatever it takes to collect. Some of the debt collection practices they employ are illegal such as showing up at the debtor’s home, contacting their family or coworkers or inventing stories that legal action is imminent. The latter recently came to the attention of the 3rd Circuit Court of Appeals.

In that case, a consumer debtor received a letter from a collection agency’s “legal department.” However, after investigation, it was discovered that no attorney worked in that office and that the agency was merely attempting to intimidate the debtor.

The debtor sued the company and the court ruled in his favor. In its ruling, the court reasoned that, "[The Fair Debt Collection Practices Act] forbids '[t]he false representation or implication that … any communication is from an attorney.' … Therefore, a debt collection letter can be deceptive under the [Act] even if it only implies that it is from an attorney. It is possible that the phrase 'Legal Department' could imply to the least sophisticated debtor that a lawyer was involved in drafting or sending the letter."

Debt Collection Industry Booming

The debt collection industry as a whole is booming due to the slump in the U.S. economy. Debts are now sold for pennies on the dollar to what has become known as debt buyers. These buyers buy and sell debt as a commodity and go far beyond what is reasonable in their attempt to collect. Many times their actions violate the Fair Debt Collection Practices Act which was created to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy.