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San Diego, California -- August 14, 2011 -- Because of the United States debt crisis, many folks in debt have succumbed to debt collection terrorism. Yet, Debt Free League, a San Diego debt relief company with a debt consolidation alternative, states fewer debtors are going to bankruptcy court; more are suing the debt collectors. Select debtors are also using the company's debt program to fight debt recovery abuses.
In 2010, shattering 2009 records, consumers filed an estimated 13,901 lawsuits against collection agencies and creditors, including 10,914 Fair Debt Collection Practices Act cases, according to research firm, WebRecon LLC.
Consumer and business debt settlement specialist, Debt Free League prognosticates even more consumer lawsuits in 2011. They attribute the surge to the economy’s onward decline.
“Low housing and steep unemployment creates panic, causing the creditors not to issue debt loans. And as more bills are left unpaid in this dangerous circle, the debt collectors gradually intensify bullying tactics", declares Debt Free League representative, Vic Chevalier.
Also in 2010, the Federal Trade Commission, which receives more complaints about the debt collection industry than all other industries, received 17 percent more in debt collections complaints.
Chevalier comments, “One of our clients was in trouble with her husband because a collection agent disclosed on her answering machine that she owed a debt to a department store. She was unaware that that the her right was violated under the Fair Debt Collection Practices Act.”
The Fair Debt Collection Practices Act, or FDCPA is a 1977 federal law that protects consumers against debt collection abuses. Outlining specific rules under the law, debt collectors cannot falsely represent or implicate being an attorney. They cannot communicate with debtors at their place of employment after having reason to believe that such calls are not permitted. They cannot call debtors before 8am or after 9pm. They are also barred from making abusive phone calls, name calling, using profanity, calling a debtor a liar, or threatening to have people arrested. The list of FDCPA do’s and don’ts is vast.
Chevalier adds, “Most people in debt are in the dark about their debt collection rights. But, we we do a good job educating our clients on what is a debt collector violation."
Under the FDCPA, those found guilty of a debt recovery crime, must pay the victim a cash settlement reward. For each deceptive and misleading representation or other other abuse, the price tag is statutory damages of $1,000, plus court costs and attorney's fees.
Lately in the news, more people fed up are taking the violators to court.
In July 29, a Texas woman sued Firstsource Advantage for allegedly leaving her a voicemail, but failing to mention the call was from a debt collector about collecting a debt. (Waugh v. Firstsource Advantage, LLC.; case number 4:11-cv-00477; Texas Eastern Court)
In another case filed in August 1, 2010 collection agency, Global Credit & Collection Corp was sued by a Louisiana woman for allegedly threatening to sue her when it did not plan to do so. According to the suit, they falsely threatened her with a lawsuit if she did not satisfy a debt owed to Capital One although they did not have the ability to sue her. Additionally, they contacted her father's place of employment and left a voicemail regarding a breach of agreement. (Trahan v. Global Credit & Collection Corporation; case number 2:2011cv01841; Louisiana Eastern District Court)
As billions in credit card debt and other consumer loans remain delinquent, the high stakes will motivate collection agencies to break the law. But fortunately, some debt relief services are educating clients to keep bill collectors accountable.
Debt Free League trains their clients to keep a creditor call log to track potential collections violations. The strategy has paid off in reducing collection calls. It has also given their negotiators more negotiating leverage in dealing with the creditors and debt collectors.
About Debt Free League
The debt settlement company and provider of the Debt-to-Freedom Plan provides a bankruptcy and debt consolidation alternative that negotiates discounted payoffs on unsecured debts, including credit cards, signature loans, medical debt, business debt, corporate credit cards, vendor contracts, and corporate leases. The company hosts the "How to be Debt-Free without Bankruptcy" radio program and can be reached at 1-800-213-9968.
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