The debt collection industry is notorious for unfair and even illegal tactics. If you are dealing with creditor harassment or similar issues, it’s important to know that you don’t have to put up with such tactics as constant late-night or early morning phone calls.
State and federal laws place limits on the activities that creditors can engage in to collect a debt. At the federal level, the main governing law is the Fair Debt Collection Act. There are also state-level protections. In Texas, the operative law is the Texas Debt Collection Act.
Keep in mind, too, that even if debt collectors are staying within the rules, sometimes filing for bankruptcy is a good move from a debt relief standpoint. In particular, you’d want to discuss make most sense for you.
In a recent case involving a major national debt collection firm, the tactics used went so far over the line that the Minnesota attorney general’s office brought a lawsuit against the firm. This week, Minnesota AG Lori Swanson announced that the firm had agreed to pay $500,000 to settle the lawsuit.
The firm in question was Midland Funding LLC, which is part of a larger company called Encore Capital Group. Encore is one of the nation’s largest debt collection companies.
The Minnesota AG’s office accused Midland of massive “robosigning” of affidavits in collection lawsuits. The AG’s suit charged that the company had not only included incomplete or inaccurate information about thousands of debtors. The company, the suit asserted, had also knowingly targeted the wrong people for debt payments it had purchased from other creditors such as banks and credit card companies.
Under the terms of the settlement with the Minnesota AG, Midland will be required to formally prove that a debt is really owed before taking action to collect on it.
Texas Attorney General Greg Abbott has made charges against Encore Capital Group that are similar to those in the Minnesota lawsuit.
Source: “Minn. AG reaches settlement with big debt buyer,” MPR News, Elizabeth Dunbar, 12-12-12
Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our San Antonio consumer bankruptcy page.