Unfair Debt Collection and Credit Reporting

The Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA) form the foundation of consumer credit rights in the United States.  The Fair Debt Collection Practices Act promotes the fair treatment of consumers by prohibiting professional third party debt collectors from using unfair, deceptive, or abusive practices such as harassment and false statements to collect consumer debts.  The FDCPA is a strict liability law, which means that a consumer does not need to prove they suffered any actual damages in order to claim statutory damages under the Act.  Instead, a debt collector can be legally liable to a consumer if the debt collector simply engaged in conduct prohibited by the FDCPA.

The Fair Credit Reporting Act is a federal statute that promotes the accuracy, fairness and privacy of consumer information presented in credit reports, criminal background checks, educational background checks, and license checks.  For instance, a credit reporting agency collects information about you, puts it into a credit report and sells the report to lenders, insurance companies and employers.  These credit reporting agencies, including specialty agencies (such as those that sell information about check writing histories, medical records, and rental history records) must comply with the regulations contained in the FCRA or else be vulnerable to legal action for violating consumer rights.

Both the FDCPA and FCRA provide significant legal rights to consumers in the United States.  Below is a general overview of these rights; however, please contact our office to discuss your legal options if you believe your rights under the FDCPA or FCRA have been violated in any way.

Your rights under the Fair Debt Collection Practices Act:

1.     Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

  • use threats of violence or harm;
  • publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
  • use obscene or profane language; or
  • repeatedly use the phone to annoy someone.

2.     False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

  • falsely claim that they are attorneys or government representatives;
  • falsely claim that you have committed a crime;
  • falsely represent that they operate or work for a credit reporting company;
  • misrepresent the amount you owe;
  • indicate that papers they send you are legal forms if they aren’t; or
  • indicate that papers they send to you aren’t legal forms if they are.

3.     Debt collectors also are prohibited from saying that:

  • you will be arrested if you don’t pay your debt;
  • they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
  • legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

4.     Debt collectors may not:

  • give false credit information about you to anyone, including a credit reporting company;
  • send you anything that looks like an official document from a court or government agency if it isn’t; or
  • use a false company name.

5.     Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:

  • try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
  • deposit a post-dated check early;
  • take or threaten to take your property unless it can be done legally; or
  • contact you by postcard.

If you believe that a debt collector has violated any of your rights under the Fair Debt Collection Practices Act, please call us or click here to discuss your legal options.

Your rights under the Fair Credit Reporting Act:

  1. Access to your credit file is limited only to people with a valid need (usually to consider an application with a creditor, insurer, employer, landlord, or other business ) not to third parties for the purpose of marketing;
  2. You must be told if the information in your credit file has been used against you;
  3. You have a right to full disclosure of the contents of your credit file;
  4. You have a right to request your credit score;
  5. You have a right to dispute incomplete or inaccurate information in your credit file;
  6. You have a right to have incorrect, incomplete, unverified or outdated information corrected or removed from your file;
  7. You have a right to know if and when an adverse action was taken against or if you were denied credit, insurance or employment based on the contents of a credit report;
  8. You have a right to opt-out or to remove your name from unsolicited offers of credit and insurance;
  9. You must give consent for credit reports or criminal background checks to be provided to employers.  When an employer uses credit reports or criminal background checks to evaluate its employees or employment applicants, the FCRA requires employers to:
  • disclose to the employee or employment applicant, in a document consisting solely of the disclosure that a credit report or background check may be obtained about the individual for employment purposes;
  • obtain the employee’s or employment applicant’s written authorization to obtain the credit report or background check; and
  • where the employer intends to take adverse action based in whole or part on a credit report or background check, then it must first provide the employee or employment applicant a copy of the credit report and a summary of their rights under the FCRA, as published by the Federal Trade Commission (“FTC”).

If you believe that a credit reporting agency, employer, supplier or user of information has violated any of your rights under the Fair Credit Reporting Act, please call us or click here to discuss your legal options.