A debt collector is a person, company, or agency whose main purpose or aim is to recover money owed by borrowers on delinquent accounts. Debt collectors are usually hired by credit facilities and companies to help them recover debt from their debtors. They carry out the debt recovery on behalf of the credit company in exchange for a fee or a small percentage of the total amount recovered.
HOW DO DEBT COLLECTORS OPERATE?
Borrowers who are unable to meet up with their debt repayment usually have their reports sent by their creditors to the credit bureau. This will affect their credit score and if after a few months they are unable to meet up, then the debt will be transferred to a debt collector agency who will follow up and eventually recover the debt. Debts like credit card debts, phone bill debt, and back taxes are usually recovered by debt collectors. A lot of companies often dread having to chase their debtors all around town. Instead, they would rather employ the services of a debt collector to help them recover a loan for a small price.
Debt collectors often utilize many tactics to ensure that the borrower pays up the debt. If eventually, the borrower pays, the creditor goes ahead to pay the debt collector a percentage of the recovered amount.
However, if the debt collector is unable to recover the amount owed from the borrower, then the debt collector may update the borrower’s account to reflect their debt status. This has a bad impact on the borrower’s credit score and maybe a problem for them to get loans in the future.
THE FDCPA AND ITS REGULATIONS.
The Fair debt collection practices act came to be to protect borrowers from the dubious and unfair tactics employed by debt collectors during the course of carrying out their duties, to recover debt from the borrowers. Hence, the FDCPA holds debt collectors accountable to a certain professional standard that is considered acceptable by the government and is not disrespectful or infringing on the fundamental human rights of the borrower. However, during the course of implementing their tasks and carrying out their duties to their jobs, debt collectors may get carried away and can fall short of these set regulations. Examples of such violations include:
Continuous attempts to recover the debt that is not owed:
This often occurs when a debt collector keeps contacting a borrower about a particular debt that has been earlier offset, paid off, or is not even theirs. This is a common violation and it occurs due to inaccurate information on the debt collector’s part.
Bad and unethical communication skills:
This occurs when the debt collectors use inhumane and disrespectful, insulting terms on the borrower. This is very unprofessional and should be avoided.
Refusing to disclose debt:
This occurs when the debt collectors refuse to send the borrower a proper notice stating the amount owed, name of the creditor, etc within 30 days.
False statements and false representation:
This occurs when an agency claims to be a law firm, perhaps to instill fear in the borrower and make them pay off their debts quicker. They can also inflate the amount owed in debt just to exploit the borrower.
Excessive phone calls;
This can be very annoying to a borrower especially if the debt collector keeps calling them too many times, even at odd hours.
WHAT HAPPENS IF THE DEBT COLLECTOR VIOLATES FDCPA REGULATIONS.
If a debt collector assigned to you during the course of their duties violate any of the FDCPA rules, the following are likely to occur:
- You can sue them and claim damages: Once you can ascertain and prove that a debt collector has violated the FDCPA regulations then you sue them to court and claim damages. For example and a hypertensive patient who is disturbed by the many calls of the debt collector may find it difficult to function properly. Emotional damages may also be claimed if the borrower can prove that acts of the debt collector were causing emotional damage to them.
- You can recover your lost wages: if a borrower claims that the debt collector calls him during work hours or can prove that by the communications of the debt collectors, their productivity is reduced and their wages. In some cases, the wages of the borrower may even be eventually recovered.
- You may recover up to $1000 in damages:
By law, the borrower is eligible to recover up to $1000 from the debt collector in damages as compensation for the violation and injury caused by the debt collectors. The fact is the borrower does not even have to prove that the debt collector has caused them any injury, they just have to prove that the debt collector violated the FDCPA regulations.
You may not have to pay the debt: A lot of borrowers often use a lawsuit to scare debt collectors because they usually dread those, especially if they are guilty. The borrower can negotiate an out-of-court settlement with the creditor debt company to ensure that they do not end up paying the debt or paying only a little part of it. It is important to note that the FDCPA does not aim to prevent debtors from owning up to their liabilities. Hence, if you go to sue the debt collector hoping for this you will be disappointed.
GUIDELINES FOR THE OPERATIONS OF DEBT COLLECTORS.
Debt collectors must ensure they carry out all their activities within the confines of the FDCPA to avoid sanctions or court actions against them. These guidelines will help them ensure that all borrowers are not disregarded or disrespected during the course of carrying out their duties.
- If a debtor asks that the debt collector stop contacting them through a particular means then they must agree. For example, if a debtor requests that his work phone should not be contacted, then the debt collector must oblige.
- A notice of validation must be written within the specified number of days. This notice must contain how much money the debtor owes, the name of the creditor the money is owed to, a notice that the borrower has about thirty days to dispute the debt and an idea of what to do to offset the debt.
- Relatives, neighbors, and friends of the debtors may be contacted if the debt collector does not have the debtor’s contact details. However, the reason for contacting them must not be revealed to them as all information pertaining to the borrower must be treated with discretion and protected from external parties.
CONCLUSION.
Sometimes, instead of using a debt collector directly, try to sort out and negotiate suitable terms and reach a compromise. This will equally save both parties a lot of time, money that may have been incurred on legal and professional services, etc. hence, it is important that all debt collectors exercise due caution and respect the rights of the borrower and uphold the FDCPA regulations. Borrowers are also expected to cooperate with debt collectors and communicate all their reservations first before using them to court. However, if a debt collector constantly disrespects the debtor and disregards and violates the FDCPA, strict actions should be taken against them and the creditors.
Sources – HOW DO DEBT COLLECTORS OPERATE
Sources – WHAT HAPPENS IF THE DEBT COLLECTOR VIOLATES FDCPA REGULATIONS.
Sources – GUIDELINES FOR THE OPERATIONS OF DEBT COLLECTORS.
