The Federal Trade Commission, charged with protecting America’s consumers, has an arm that deals with debt collectors and their agencies for times when they cross over the line – which seems to be quite often. According to Cecelia Kang’s report with the Washington Post, the FTC’s bureau of consumer protection levied a hefty $1 million fine against a debt collection firm for violating the law.
What makes this story particularly interesting is the fact that this is the first FTC fine involving debt collectors who send text messages to debtors. The collection firm is accused of deceiving debtors by pretending to be collections lawyers, sending “threatening” text messages, and contacting people they should not have been contacting, like employers and coworkers.
The substance of the texts – which violated the Fair Debt Collection Practices Act – was threatening debtors with lawsuits and jail time if they didn’t pay up. Many of these debtors, as Kang reports, were payday loan borrowers who had fallen behind.
As with any debt collection activity, a bankruptcy filing – if that’s what’s right for you, depending on your circumstances – puts a stop to the phone calls, letters, and text messages. This is known as the automatic stay, which requires debt collectors by law to cease all collection activity, once the bankruptcy case is filed.
In other words, a fine levied by the FTC isn’t the only thing that can be done to stop debt collectors.
Feds Levy $1M Fine Against Overzealous Debt Collector