Scams, scams, and more scams! False, illegitimate, or even worse, illegal debt collection agencies are popping up left and right. How do you know when to pay a debt and when not to pay a debt, or what’s real and what’s not?
In this article, I’m going to give you the tools you need in your toolbelt, so you can strike back against debt collectors - AND WIN!
If you haven’t yet been approached by clients who have been harassed by debt collectors, you will soon, and you need to know what to do and what NOT to do to help and protect them.
So, there are several federal laws and regulations, primarily the Fair Debt Collection Practices Act (FDCPA), and state mirror laws that protect consumers from being harassed or abused by debt collectors. And that actually happens a lot!
The FDCPA was created to prevent unfair, deceptive, or abusive practices by debt collectors. But, too often, it doesn’t stop them from breaking the law in an attempt to collect on the debt.
However, once they do break the law, it’s possible not only to stop the harassment but also to be awarded a settlement!
As you’re becoming an expert in credit repair, it’s important to understand the regulations so you can advise your clients on how to respond and whether they are being treated unfairly according to the law.
As your credit repair business grows it is recommended you build a relationship with a local law firm that specializes in debt collection so you can work together when necessary.
So let me ask you a question? Do you like confrontations? Do you enjoy arguments? Probably not, right? I hate them!
And chances are, your clients do too! We all want to live in peace and avoid major conflicts. The problem is - that’s exactly what illegal debt collecting scammers rely on!
Instead of fighting (AND WINNING), most of our clients, to avoid the harassment:
- Start paying on a debt that either should’ve never been on their credit report in the first place
- Is past the statute of limitations and is not legally collectable
- Or won’t help their credit AT ALL
… and that is just a waste of money!
That’s why as Credit Heroes, we’ve got to arm ourselves with knowledge to support our clients, so they can know their rights, and have the confidence to handle these things when they happen.
Here’s why this is important:
The FDCPA includes three major debt collector restrictions that could affect your clients.
- Harassment or Abuse
A debt collector may not do or say anything that leads to harassment, oppression, or abuse. This includes making threats to individual safety, income, freedom, or employment.
For example a debt collector:
- Cannot use abusive or obscene language.
- Cannot call before 8am, or after 9pm unless you agree.
- Cannot call you without telling you who they are.
- Cannot call you at work if you have asked them not to
- Cannot speak with anyone else other than your attorney about the debt.
- Cannot publish your name publicly as someone who doesn’t pay their bills
They also may not threaten to publish a debtor’s name (which is the person who owes the money).
- False or Misleading Representations
A debt collector may not represent themselves in a deceptive or misleading way.
This means they cannot:
- Threaten to have you arrested
- Misrepresent how much you owe them
- Pretend to be an attorney if they are not
It might sound crazy, but these guys do this stuff! They can be very sneaky!
They must be very clear that they are debt collectors and are contacting the individual for the purpose of collecting debt.
They must also communicate that a disputed debt is being disputed. That means, a debt collector that sends communications or makes phone calls claiming to be from a government agency, claiming to be an attorney, law enforcement, or even pretending to work at a credit bureau, in order to get information or payment, would be in direct violation of the FDCPA and you have the power to take legal action against them!
- Unfair Practices
A debt collector cannot use any unfair or outrageous means to collect a debt. This includes adding or causing a debtor to incur fees that were not part of the original debt agreement.
For example, a debt collector may not collect EXTRA FEES or INTEREST from the debtor!
Once your client receives an initial letter of communication from a debt collector, they have thirty days to respond to that letter by disputing the validity of the debt or to requesting verification of the debt.
Either one of these letters will trigger a stop in all communications from the debt collector while the debt is being investigated.
Keep a really good paper trail for all the communications your clients have had with any debt collectors. They can take notes during calls, and keep a good record of what was said, because those notes could become critical evidence if the collection agent breaks any laws.
What To Do When A Debt Collector Breaks The Law
- You can report the debt collector to a Government Agency. For example The FTC at ftccomplaintassistant.gov or CFPB at consumerfinance.gov/complaint
- If the debt collector is harassing your client, you can force them to stop communicating by sending a cease and desist letter.
- You can report the violations to the State Attorney General, because the debt collector is probably violating State laws too.
- You can sue the debt collector in Small Claims Court.
- You can sue the debt collector in State Court.
- You can use this violation as leverage in a debt settlement negotiation. Debt collectors know how costly an FDCPA lawsuit can be for them, so they may be more likely to settle the debt.
- And finally, you can also consult with a law firm that specializes in debt collection. If they see that the debt collector has broken the law (which happens all the time) they can get a nice settlement for your client).
I recently had one of our Credit Repair Cloud users and credit repair expert, Ray Bueno, on the podcast with me - you may have heard his interview. His YouTube channel is called “Keeping It Real With Credit,” he has over two hundred thousand subscribers and his video has nearly 6 million views!
In our interview he shares his story of coming back to America after fighting overseas as a Marine. When he came back from Iraq he discovered that he and a bunch of other soldiers, had a ton of bills go to collections because they weren’t around to catch the missing payments!
So, he did what most of us who don’t know any better do. When he got harassing calls about his debt, he started working to pay it off… only to find the money he was paying didn’t reflect on his credit report and wasn’t even held by the same company he’d missed the payments with!
Instead, it was a total scam!
He had to hire a lawyer and fight the system just like I’m telling you you may have to do! And guess what? Not only did he WIN, but now he’s changing thousands and thousands of lives with his story and the knowledge he’s learned by fixing his own credit!
If you haven’t listened to that podcast - you should listen to! It’s really cool and it has a ton of great information on credit repair and debt collections!
So if you want to dive in and really understand the ins and outs of credit repair and how to launch a credit repair business - FAST, I want to invite you to join our upcoming Credit Hero Challenge!
It’s a live experience where our coaches, our team of experts, and I, walk you through, day by day, step by step as you use our proven systems to start and grow your profitable recurring revenue business!
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