the Federal Fair Debt Collection Pratices Act and the Michigan Collection Practices act provide parameters within which debtors and creditors must operate to keep the process fair to all involved.
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Collection Tips for Creditors Part 1: Don't do any of the following
Debt Collectors should avoid the following practices as they are illegal:
• Using obscene, abusive or profane language, or threatening violence.
• Calling relentlessly or at unusual hours (between 9 p.m. and 8 a.m., without permission).
• Calling you at work after you've told them not to.
• Calling without identifying themselves.
• Continuing to call you after you've told them in writing to stop or after you've told them to call your lawyer.
• Misrepresenting who they are, the amount owed or the legal status of the debt.
• Sending documents that simulate court orders or records.
• Threatening to take action that cannot legally be taken.
• Falsely accusing you of committing a crime, threatening to have you arrested or threatening to seize property or garnish wages unless they intend or have the legal right to do so.
• Causing you to incur charges for collect calls, travel expenses or postage fees.
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Collection Tips for creditors Part 2: Don't do any of the following
• Doing anything to embarrass you publicly.
• Trying to collect more than is owed or a debt that is beyond the statute of limitations.
• Calling friends, neighbors and others to discuss or collect the debt. They can call others once to find out how to contact you.
• Giving false credit information to a credit reporting company or others.
What state law says
Michigan's Collection Practices Act is similar to the federal law but has lower statutory damages -- as little as $50 for inadvertent violations.
The Michigan Department of Labor & Economic Growth licenses debt collectors and investigates complaints against them for violating state law.
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Debtors have a right to Challenge the Debt
• Within five days of contacting you, a collector must send a written notice telling you how much you owe, to whom and what you can do to contest the debt. You have 30 days to send a letter challenging the debt or asking for verification. The collector must stop contacting you until that's done.
• You also can send a letter telling the collector to stop contacting you. After that, they can call you only to say they will comply, or that they intend to sue you or take other legal action. Your letter doesn't relieve you of the debt or prevent the collector from taking you to court to collect.
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What to do if a Debt collector violates fair collection pratices?
Reporting violators
• Contact the Federal Trade Commission at www.ftc.gov or 877-382-4357. The FTC occasionally takes legal action against debt collectors and enters complaints in a database used by law enforcement.
• You also can file a report with the Michigan Attorney General's Office at www.mi.gov/ag, or call 877-765-8388.
• You can file a complaint with the Department of Energy, Labor & Economic Growth by calling 517-241-9202 or by downloading a complaint form at www.dleg.state.mi.us/bcsc/forms/enf/lce-992.pdf.
To learn more, go to www.ftc.gov/credit.
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Conclusion
Both creditors and debtors have rights. The manner in which a debt is collected is controlled by both state and federal law. Violating these rules can open up the violator to siginificant penalties. To avoid these penalties, understand the Debt collection law at the state and federal level and follow the debt collection practices outlined therein.
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