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Debt Collection Agencies That Violate The FDCP Act

Author : john kenvin


The collection agencies active participation in collecting debts from the vulnerable debtors in the US has increased in the recent years. These agencies employ illegal means to collect debt from the borrowers. With the rising complaint of the victims the federal law has been forced to implement Fair Debt Collection Practice Act to prevent creditor harassment. According to the FDCPA, the debt collectors are forbidden from illegal collection practices, using abusive language, threatening calls to the debtors and so on.

Here are some instances how these collection agencies have violated the FDCP Act.

The owner of the Legal Action Recovery, a professional debt collection firm, violated the FDCPA rule. The firm threatened the debtors to pay off debt. However, at that time these victims didn't even owe the debt as it had been discharged in bankruptcy procedure and passed the statute of limitations. The debt collectors even warned the debtors of taking legal action if the payments are not made within time. The firm even masqueraded as law enforcement officers to pressurize the victims to clear their payment of the delinquent account.

The owner tried to operate his firms from prison and corresponded with his staffs regarding the account management and personnel issues. He was always updated about his banking activities. So, the New York Attorney General's Office has lodged charges against the owner continuing to operate the firm.

Charges have been filed against Buffalo, NY collection agency operated by Tobias Boyland, known as Bags of Money, for creditor harassment. Boyland's debt collectors violated the state as well as federal law disguising as law enforcement officials. Most consumers gave in to the demands of the collection agency as they were threatened of being arrested on failing to make their payments. The collection agency has been found claiming for non-existent debts. This agency even tried to collect payments after the passing of the statute of limitations or overstated the amount owed on the actual debt. The intimidated debtors usually make payments to avoid further harassment and humiliation. The company used to provide wrong contact information to make the consumers believe that the businesses were located far from the Buffalo area.

California's Bad Check Diversion Act (BCDA) empowers a district lawyer to sign a contract with a private body to run a diversion program for poor check writers. The company District Attorney Technical Services Inc had an agreement with various district attorneys' offices to offer collection services to merchants who were offered with bad checks. The CEO of District Attorney Technical Services Inc. (DATS) was found personally liable for violating FDCPA. He was involved in collection practices and the firm's only source of income was its collection activities based on the contract that he negotiated with the district attorneys' offices. This firm even collected fee that was not authorized by the Bad Check Diversion Act (BCDA). The court was informed that the collection letter stated that legal action and arrest warrants will be issued for individuals who are unable to pay on time. But DATS never bothered to present the file before the district attorney's office. Therefore, the firm violated the FDCP Act and had to face the consequences.

Continental Central Credit (CCC) collected delinquent accounts for The Association for Maintenance Fees. CCC charges 40% on all debtors account after the money is retrieved from them. The collection agency sent second collection notice less than 30 days after sending the first notice thus violating the FDCPA rule implemented by the Federal Trade Commission. The debtor bought a class against the CCC for violating the Act. The debtor had 30 days to dispute the validity of the debt from the initial correspondence from the debt collectors. So, this is also considered to be a threatening tactic as the susceptible debtors might think that if they are unable to make the payment it might lead to some legal action.

So these are the four amongst many other debt collection agencies that have violated the FDCP Act and had to pay for the consequences for illegitimate debt collection practices.


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WeStopDebtCollectors.com has a team of highly qualified and experienced professionals from the field of consumer law and has handled more than 30,000 consumer actions (Debt Collection Laws) with over 98 percent of these cases being amicably resolved without the need for trial.

Article Source:
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Tags:   fdcpa, the fdcpa, fdcp act, fdcpa violation, violation of fdcp act, fair debt collection practice act, creditor harassment, violated the fdcp act, fdcpa rule, new york attorney general’s office, ny collection agency, bad check diversion act

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Submitted : 2011-08-16    Word Count : 720    Times Viewed: 523