The Texas Debt Collection Act and the Federal Fair Debt Collection Practices Act prohibit debt collectors from taking certain actions when dealing with alleged debtors. They also provide remedies for people when collectors fail to comply with the statutes. This article is to help you determine whether a debt collector has violated the law and what you can do about it.
Who is a “debt collector”?
First, one must determine whether the law applies to the debt collector at issue. The term “debt collector” may seem straightforward. The Texas Finance Code defines a debt collector as “a person who directly or indirectly engages in debt collection and includes a person who sells or offers to sell forms represented to be a collection system, device, or scheme intended to be used to collect consumer debts.” This term can include the original creditor, such a mortgage company or credit card issuer, a debt buyer, or sometimes even a law firm.
The Federal Fair Debt Collection Practices Act defines as debt collector as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”
Both definitions have important exclusions and interpretations by courts, so it is important that you contact an attorney to determine whether a person attempting to collect a debt is actually a debt collector under the two laws.
Texas law prohibits debt collectors from threatening debtors. In other words, they are not allowed to use or threaten to use violence, falsely accuse debtors of committing a crime, or threaten the debtor with arrest or other criminal action when no crime has been committed.
Debt collectors may not harass debtors, such as by calling the debtor’s phone repeatedly or cursing at the debtor or using obscene language.
Debt collectors also may not act unfairly or unconscionably, such as trying to collect interest or charge fees when the original agreement does not provide for interest or fees, or make fraudulent or deceptive representations to the debtor, such as using fake names, failing to disclose the name of the debt collector, misrepresenting the character or amount of a debt, falsely purporting to be authorized by or affiliated with a governmental agency, and more. The Finance Code provides a “laundry list” of other prohibited acts.
The Federal Fair Debt Collection Practices Act prohibits debt collectors from doing many acts, including the following:
(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to certain other persons.
(4) The advertisement for sale of any debt to coerce payment of the debt.
(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
(6) The placement of telephone calls without meaningful disclosure of the caller’s identity.
(7) Communicating with a person at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o’clock antimeridian and before 9 o’clock postmeridian, local time at the consumer’s location;
(8) Communicating with a person if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or
(9) Communicating with a person at his place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.
(10) The false representation or implication that any individual is an attorney or that any communication is from an attorney.
(11) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.
(12) The threat to take any action that cannot legally be taken or that is not intended to be taken.
(13) The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.
(14) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.
(15) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.
(16) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
(17) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.
What should I do if a debt collector violates the law?
First, it is important to always keep all documentation exchanged with the debt collector and to keep detailed notes about each communication. For instance, always get the names of the persons with whom you talk and make note of the date, time, and content of each phone call. If you send any written correspondence, send it via certified mail return receipt requested and keep a copy for your records. Keep all documents sent to you by the debt collector. Good documentation is essential to proving your claim that a debt collector violated the law.
If a debt collector is using prohibited methods in attempting to collect a debt from you, you can petition the court for an injunction to prevent the debt collector from such acts, seek actual damages resulting from the violation, and also possibly recover your attorney’s fees. Another important thing to keep in mind is that the Texas Debt Collection Act is a “tie-in statute” with the Deceptive Trade Practices Act, or DTPA. This means that a person can assert a DTPA cause of action for a violation of the Debt Collection Act. This also entitles a person to seek those damages that are available under the DTPA, which can potentially include mental anguish damages and treble damages.
Second, if you are facing harassment or abuse from a debt, contact an attorney who has experience in dealing with debt collectors. Your attorney will be able to help you determine whether you have a viable cause of action against the debt collector, help negotiate a settlement of a valid claim, and defend you if a lawsuit is filed against you.