Dealing with a dishonest debt collector

By STEVE BUCCI
bankrate.com
August 16, 2004

- Dear Debt Adviser,

Recently I fell less than two weeks behind on a car loan debt. This prompted the car credit company to begin attempts to contact me. Though the credit company had my proper contact information, they instead contacted friends, neighbors and my place of employment. The company told the recipients of the calls the name of the credit company and told them they were trying to locate me for the purpose of offering me a job.

As a result of one of these calls, my employer, assuming that I was looking for another job, terminated me.

I believe the actions of this creditor to be outrageous. I have contacted them and obtained an admission that they were engaging in this illegal practice.

I have lost my job because of the actions of the creditor and have now refused to pay. Additionally, I now receive what appear to be computer generated phone calls at all times of the day and night. When I answer, the callers hang up. I believe it is the creditor checking to see if I am home prior to generating a real phone call, because a follow-up call with a live person is generated within an hour.

What can I do?

- Steve

Dear Steve,

What a nightmare! The creditor in your situation has elevated harassment to an entirely new level. The practices that you describe are indeed illegal as described in the Fair Debt Collections Practices Act. Not to mention unethical and downright nasty.

As much as I can understand you wanting to hurt this creditor where it lives by withholding payment, there may be better ways to get satisfaction. To avoid adding problems to an already horrible situation, I am going to advise you to resume making your payments to the creditor. Regardless of whether the creditor tried to collect the debt illegally, the debt is real and the creditor can report to the credit bureaus (and probably has) the fact that you are 60 days to 90 days, or however long it has been, late.

In addition, the creditor could have the vehicle repossessed for nonpayment.

Your next step will require some research. I suggest that you look for an attorney who has experience in credit and debt laws and who is experienced in class-action suits. Beyond helping you determine your legal rights pertaining to the loss of your job as a result of the creditor's actions, I believe that you may not be an isolated incident, but the victim of a despicable process that may well have affected many others. The Fair Debt Collections Practices Act provides recourse for legal action to be brought to recover monetary damages, which may include actual and statutory damages, attorney fees and costs. Also, if you are going to get an attorney, I suggest you get the toughest one you can find.

Most creditors are scrupulous about collecting debts, especially ones only two weeks past due. Unscrupulous ones, such as you describe, rely on people not understanding their rights under the FDCPA. To perhaps help others avoid your nightmare, here are the FDCPA rules for third-party contact by debt collectors:

A collector can only call a third party to confirm an address, phone number or place of employment for the person in question.

Collectors cannot identify themselves as calling from a collection agency unless the caller specifically asks where the caller is employed.

A bill collector can only call a neighbor or other third party once, unless the collector reasonably believes the third party has gained new contact information or the third-party requests to be contacted.

Additional information on this can be found at the Federal Trade Commission Web site or from Bankrate.com's "Guide to Managing your Debt."

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