Debtor Rights against Debt Buyer Harassment
UPDATED: May 11, 2018
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Debt buyers, private companies that purchase consumer debt for pennies on the dollar and then do whatever it takes to collect that debt, have taken telephone harassment to new levels. Calling a debtor’s coworkers and neighbors is a common practice for debt buyers; however, it is against the law and you can fight back!
Today’s Telephone Harassment Practices
Telephone harassment by debt buyers is very common, according to Steve Recordon, an attorney from San Diego, California whose firm represents individuals who have been sued or harassed by debt buyers. In a recent interview, he explained the kinds of tactics they use:
What happens is the debt buyer has a number of people in a room where they may have little booths and 20 or 30 individuals making phone calls. These individuals have certain goals that they have to reach. It's a lot like what you would see if you went into a used car lot where the sales people have a morning meeting or a door-to-door vacuum cleaning sales place where they have pep rallies.
The collectors get hyped up, set goals for the day, the number of phone calls they want to make and the number of dollars and commitments they want to get over the telephone. This is where the harassment can be very, very abusive. For example, they may phone the debtor's parents, impersonate a government prosecutor and request the parent to get the debtor to call them about a criminal investigation. None of that's true, but that's just one of many, many tactics they use.
I had a client yesterday who said that the debt buyer called and said that they were sending a marshal over to take her car. Although that’s absolutely illegal and can’t happen – guess what? It caused her to go to her dad and have him pay $1,700 on a debt that she didn't owe. So it's very, very effective.
Block and Office Parties: Embarrassing & Illegal
The industry has coined a couple of terms that debt buyer collectors use – the block party and the office party. All these tactics are illegal and violate the Fair Debt Collection Practices Act (FDCPA), California’s Rosenthal statute (California’s version of the federal law) and can result in other individual torts like intentional infliction of emotional distress. Recordon explained what each of the terms means:
- Block party. A block party is when a debt buyer may call five or ten of the debtor’s neighbors. Through a program, they're able to get the phone numbers and names of neighbors, call them and tell them things like, ‘Hey Joe, your neighbor at such-and-such an address, we've been trying to get a hold of him because we have some really important information for him. Could you go over and have him call us?’ They’ll call around the neighborhood and all these concerned neighbors will run over to Joe's house and tell him that he has to call this person because something horrible is going on.
- Office party. An office party is very similar. By making phone calls, the debt buyer is able to find out the name of the individual's employer and other employees that he works with. They’ll call the other employees in the office and make up another similar story such as he’ll lose his car if he doesn’t call or that the police may come and arrest him. Now, all of a sudden, everybody at the office knows there's a problem. The debt collector may make up some fictitious problem, but may just disclose the fact that there's a debt that's unpaid.
He says that either one is embarrassing, either one violates the statutes and either one is actionable.
Increasing Levels of Aggression by Debt Buyers
We asked Recordon whether the level of aggression increases as the debt is sold to subsequent debt buyers. Without hesitation, he answered, “That is exactly what happens,” and explained:
They even become more aggressive. Let’s say Debt Buyer No. 1 just bought an account. It's brand new. Debt Buyer No. 1 will start sending letters and calling – the first letters and calls may actually be fairly pleasant. However, if the debt remains unpaid, then it’s going to get more aggressive. I've seen situations where, eventually, they go down to the debtor's house, bang on the door (and this may be at midnight, or 1:00 a.m. in the morning) and yell at them threatening to wake up the whole neighborhood if they don't come to the door and pay the debt. Debt Buyer No. 5 knows that Debt Buyers 1, 2, 3, and 4 couldn't collect and that the only way they're going collect is by using extreme measures.
Debt Collectors Cannot Call Debtors’ Cell Phones Without Permission
Calling cell phones without permission is one of those measures. Recordon says that debt collectors absolutely cannot call a debtor on his or her cell phone without permission. He told us, “If the debtor did not give the collector his or her cell number and permission to call it, that debtor needs to call me right away. The collector has violated both federal and state laws and the debtor will be able to collect money damages from the collector.”
If you’ve been sued or harassed by a debt buyer / collection agency, contact an attorney whose practice focuses in this area of the law to discuss your situation. Consultations are free, without obligation and strictly confidential.