LEGAL GUIDE
Written by attorney James Richard Rowe II | Jun 3, 2010

Fight Back Against Ruthless Debt Collectors...and Win With Federal Law! (Q&A)

Q. Back in 2006 I had an online loan that wasn't paid back. The company has since sold it to a collection agency that keeps calling me and threatening to have a warrant issued for my arrest if I don't pay it back within 30 days. My question is can they do this or is it just a scare tactic they are using? A. If not paying a debt was considered a crime, our prisons would be overflowing! Debtor's prison is long gone. However, while they can't issue a warrant for your arrest, they can still sue you! That's a civil matter, but it would nonetheless haul you into court. Nowadays, with the economy failing and unemployment ever rising, more and more people are falling into dire financial trouble. Collection agencies must work even harder to collect bad debt when people are out of work, so they often resort to strong-arm tactics such as relentless phone calls at all hours, harassing you at work, and even threats of arrest or, worse yet, physical harm. But you can fight back. A client of mine had a debt collector call him repeatedly at his place of employment to collect a debt that my client had already informed him had been disputed with the creditor. His explanation to the debt collector fell on deaf ears, who phoned nearly a dozen times in the span of a few minutes. Thankfully, he found protection under the Fair Debt Collections Practices Act (FDCPA). The FDCPA is a federal law that gives you rights when dealing with creditors, and sets standards that debt collectors must follow at risk of hefty fines and civil liability. The FDCPA, in part, restricts creditors from

(1) contacting third parties about your debt, such as a neighbor or boss;

(2) threatening conduct that the creditor has no intention of taking against you, such as a threat of foreclosure on your house for a debt unrelated to your mortgage;

(3) making repeated phone calls or calling at unreasonable hours (usually outside of 8am-9pm);

(4) using obscenity, racial slurs, etc.;

(5) sending a collection letter in a form which makes it appear to have been issued by a judge or court of law; or

(6) making false representations, misrepresenting the amount of the debt or original creditor, or threatening arrest. With the FDCPA on your side, you can fight back. Under the FDCPA, if you can prove that a creditor violated the Act you may be entitled to actual damages, plus punitive damages of up to $1,000 per violation. That could mean the debt collector may end up owing you money! Additionally, you may be able to recover court costs and have the debt collector ordered to pay your attorney's fees.

Using his phone records my client was able to prove that the debt collector repeatedly harassed him with call after call after call; he sued successfully and obtained a favorable settlement. At day's end, the debt collector ended up writing a hefty check. If the debt collector calling you threatened to have you arrested, the FDCPA would provide you with a valid cause of action for filing a lawsuit. If you're not the 'suing type', you can always use the FDCPA as a sword of sorts when communicating with an unruly debt collector.

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