Debt Collection and Credit Reporting

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Harassment by debt collectors is a daily fact of life for many consumers. Because of a history of abusive practices, Congress passed the Fair Debt Collection Practices Act (FDCPA) to tightly regulate the debt collection industry. Consumers can protect themselves from harassment by debt collectors under the FDCPA, whether they owe a debt or not.

  1. Within 5 days after initially contacting a consumer, debt collectors must send a letter identifying the debt at issue and explaining some of the consumer’s rights under the FDCPA.
  2. The FDCPA provides consumers with the right to stop debt collectors from communicating with them. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or wishes the debt collector to cease further communication with the consumer, the FDCPA prohibits the debt collector from further communication with the consumer (except to notify the consumer that it will stop trying to collect the debt or that it may sue the consumer to collect the debt. The FDCPA prohibits debt collectors from threatening actions that they do not intend to take.)
  3. The FDCPA also strictly limits debt collectors’ communications with third parties in connection with collecting a debt. Debt collectors typically cannot contact family members, employers, or most other people in connection with collecting a debt without the consumer’s permission.
  4. One exception is that debt collectors can report debts to credit reporting agencies. The law provides consumers some control over how debts are reported. If a consumer has already disputed a debt, the debt collector must also report the dispute to the credit reporting agencies. (Many debt collectors do not follow this law. Indeed, some debt collectors continue to report a debt as undisputed even after they dismissed their collection lawsuit against a consumer.) Consumers with any valid dispute should dispute any debt on their credit report with the debt collectors in writing. If a debt collector nonetheless continues to report a debt, the consumer should provide the credit reporting agency with complete documentation of the dispute. Submitting a dispute to a credit reporting agency triggers a reinvestigation under the Fair Credit Reporting Act, which typically provides more legal rights than simply disputing a debt with a debt collector. Even if the reinvestigation does not cause the credit reporting agency to delete the debt from a consumer’s report, the consumer still has the right to append a short statement of the dispute to the consumer’s credit report.
  5. California also regulates the debt collection industry with the Rosenthal Fair Debt Collection Practices Act, which applies most of the protections available under the FDCPA to a much broader definition of “debt collectors.” California’s Consumer Credit Reporting Agencies Act also provides rights and remedies in addition to those found under the FDCPA or FCRA, including the right to sue if a debt collector provides information to a credit reporting agency which it knows or should know is incomplete or inaccurate.

These statutes are complex and the relationship between these statutes can be even more complex. Consumers may not always know when their rights have been violated. Preston Law Offices has extensive experience with the FDCPA, the FCRA, the Rosenthal Act, and the CCRAA. If you have tried to stop a debt collector from harassing you, or have repeatedly disputed information on your credit report, you can contact Preston Law Offices through this website or via email.

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