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Wednesday, October 19, 2011

Domingo and Molaer : Beware of Special Discount Promos!

Debt collectors have been the most complained-about people in the credit card business . And abuses by out-of-control collectors appear to be getting worse.
Debt collection harassment and abuse can take a particular toll on vulnerable older consumers.  The good news is that there are Central Bank regulations that are intended to protect consumers from debt collection and harassment.  These laws apply regardless of whether the consumer owes money on the debt being collected.  The bad news is that many collectors still do not comply with the law.
The information below will help advocates counsel clients about what a debt collector can and cannot do and how consumers can protect themselves.  It is also important to work with older consumers to help them evaluate which debts are highest priorities and what the possible consequences might be if they are unable to repay all of their debts.
What Can a Debt Collector Really Do?
A debt collector working on behalf of a creditor can do little more than demand payment.  If the creditor has not taken the client’s house, car, or other property as collateral on a loan, then legally the creditor can only do three things:
  1. Stop doing business with the consumer.
  2. Report a default to a credit bureau.
  3. Sue the consumer in court.  This threat may not be as serious as many consumers think.  Many creditors do not follow through on their threats.  Even if they do, consumers can raise defenses to paying the debt.  And even if the creditor obtains a judgment, this judgment still does not force the consumer to pay the debt.  It only gives the creditor the right to try to seize part of a consumer’s wages or property. 
 Debt Collection
Can a debt collector contact me by phone?
Yes, but within limits. A debt collector cannot:
Call you before 8 a.m. and after 9 p.m. unless you agree.Call you repeatedly or use the phone to harass you.Trick you into accepting collect calls or paying for telegrams. Use obscene language, make negative comments about your character, or make religious or ethnic slurs.
Call you at work if the collector knows your boss does not allow such calls.
If you have an attorney, the collector should call that person, not you.
Fair play under the FDCPA also means a debt collector owes you the truth about who it is and what it intends to do. False statements and deceptive practices like the following are not allowed. A collector cannot:
  • Claim to be an attorney or government employee when it is not.
  • Send you documents that look like legal papers when they are not.
  • State that forms sent to you are not legal documents when they are.
  • Say that you committed a crime.
A debt collector threatened to sue me. Can it do that?
A collection agency can file a lawsuit to collect a debt. However, among the many things a collector is not allowed to do is threaten you with a lawsuit just to get you to pay the debt. Examples of threats and deceptive practices prohibited by the FDCPA are when the collector:
  • Says it will garnish your wages or sell your property if it is not legal to do that.
  • Says it will sue you, if the collector doesn't intend to sue.
  • Is not truthful about the amount of money you owe.
  • Says you will be arrested if you don't pay the debt.
  • Threatens you with violence.

Bankard is now owned by the Yuchengco Group of Companies (of the PACIFIC PLAN “fame”).We wonder whether the Yuchengco Group knows about this scam! 

“False representation or deceptive means to collect any debt or obtain information concerning a cardholder.” 
Unfair Collection Practices. Banks, subsidiary/affiliate credit card companies, collection agencies, counsels and other agents may resort to all reasonable and legally permissible means to collect amounts due them under the credit card agreement: Provided, That in the exercise of their rights and performance of duties, they must observe good faith and reasonable conduct and refrain from engaging in unscrupulous or untoward acts.  Without limiting the general application of the foregoing, the following conduct is a violation of this Subsection:  a)    the use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person;  b)   the use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws;  c)   disclosure of the names of credit cardholders who allegedly refuse to pay debts, except as allowed under Subsec. X320.9 and 4301N.9;  d)   threat to take any action that cannot legally be taken;  e)   communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed;  f)    any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and  g)   making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 A.M. or after 10:00 P.M., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient  opportunities for contact.  
Important Note To Complainants!  Complainants should send email to BSP:

BSP requires the following:

1.   The full name of the complainant  and the financial institution (FI) being complained of:
2.   The signatory to the complaint should be the transactor or his/her authorized agent.
3.  Contact information and address of the complainant .
4.   Copies of relevant documents that support the complaint. 
5. The facts of the harassment case. 

Tips for Dealing with a Debt Collector
1. Know how the collection process works. Why are you being contacted by a collection agency? It usually means that a creditor has not received payment from you for several months. They have negotiated with another company or are using an in-house affiliate called a debt collector to attempt to get you to pay. Third party collectors often purchase your debt for less than you owe, and your debt is now owned by the collector. A collector may also work for the creditor in return for a fee or a percentage of any money collected. In-house collectors that are affiliated with the original creditor work on behalf of the company directly. Because the creditor has taken a loss on your account or because you are late with making payments, this negative information may show up on your credit report.
Another reason a debt collector may be contacting you is that an imposter has used your identity to obtain credit, a crime known as identity theft. You are not responsible for the debt, but you may experience difficulties convincing the debt collector of this. Under federal law, the debt collector has certain responsibilities in investigating your situation and may be liable for failure to cooperate.
2. Know your rights. Learn to recognize abusive collection practices. Even if you owe a debt, a collector owes you fair treatment and respect for your privacy. Also, be aware that even if the collector's conduct does not exactly match the language of the federal Fair Debt Collection Practices Act, that collector may still be liable for its conduct.
3. Ask questions and learn specifics. Often the first contact with the debt collector is a telephone call from a representative, a pre-recorded message asking you to call a mysterious toll-free number, or a letter. When a collector calls or you call back, get as much information as possible. Ask for the name of the caller, the collection agency, the creditor, and the address and fax number for sending correspondence. Also ask about the amount the collector claims you owe. In this first call, you should also tell the caller you expect written follow-up if you have not yet received a notice in the mail.
4. Assert your right to privacy . If your first contact with a collector is by telephone, tell the caller that you want all future contact in writing rather than by phone. You can also instruct the collector not to call you at work or at all if that is your choice. Make notes of your first conversation and start to keep a file.  It is important to follow up on such requests in writing right away. Your letter should include requests about contact or other matters discussed in your first telephone contact. Note: If you notify the collector not to contact you at all, it is entitled to contact you one more time to explain how it intends to proceed.
Also you should tell and write the collector that you are the only person to be contacted. Since the agency is well aware of your location, there is no need to contact your employer, neighbors, relatives, or friends to find out where you are. If you are an employer, friend, neighbor, or family member who is being contacted by a collector, you can write the collector and tell it to stop contacting you.
5. Start and keep a file. At the first contact from a collection agency, start a file. Your file should include:
  • Dates and times of phone conversations, pre-recorded messages the collector leaves on your voice mail, and when you send or receive correspondence.
  • Notes of conversations along with the name of the collection agency employee.
  • Copies of correspondence you send, as well as those you receive including envelopes. Collectors are supposed to give you written notice of the collection action five days after you are contacted by phone.
  • Copies of messages that are abusive or overly intrusive.
There is no set time after which you will never be contacted again about a debt. Some debts are sold to other collectors even after being properly disputed. Keep all records regarding disputed debts indefinitely in case the debt comes back to haunt you, and you need to dispute it again.
6. Put it in writing. Send any correspondence, including disputes, to both the collection agency and the creditor by Certified Mail, Return Receipt Requested. When in doubt, send a written confirmation of anything that you may need to prove later (for example, a promise or threat made, a rude or harassing comment received, or an explanation given you that may show improprieties in the handling of your dispute or your payments).government agencies, or collector associations about abusive practices.
7. Clarify payments. If you negotiate a repayment plan over the phone, ask the representative to send you the terms of the plan in writing. You may also write a letter that explains your understanding of the negotiated repayment plan. Payments made to a debt collector when multiple debts are involved should clearly specify to which debt the payment is to be applied. It is possible to dispute one debt, but agree to pay another. Also, any promise to remove or adjust reports in your credit history should be documented for later enforcement.
8. Pay the proper party. Payments should be made to the debt collector and not the original creditor unless you are expressly instructed to pay the creditor directly. In this case, you should confirm such instruction in writing to both the creditor and the debt collector.
9. Don't be coerced. Never pay a bill you don't owe just to get the collector to "go away." Any payment of the debt is considered an acknowledgement that you are responsible. Even if you pay, that will not erase a negative entry on your credit report.
10. Examine balances, interest charges, and other fees and charges. Carefully review the amount you are being asked to pay. You should ask the collector to tell you the amount of the original debt as well as give you a breakdown of any interest, fees, or charges that have been added. Federal law prevents a debt collector from charging you any more than the amount you actually owe, if not permitted by the laws of your state or the terms of the original agreement with the creditor. (15 USC § 1692(f))
11. Complain about abusive collection practices. Under the federal FDCPA, a collector is not allowed to make idle threats, express or implied (for example, "We must get your payment no later than the day after tomorrow"), or use abusive or profane language. A collector should not discuss your account with third parties or use the phone to harass you.