What does the law say about repairing your credit?

What does the law say about repairing your credit?

The United States Congress enacted the Fair Credit Reporting Act (FCRA) in 1971 to insure that the credit bureaus investigate the credit items disputed by consumers.  It was last amended in 2001. This federal law set technical rules which gave the consumer the right to challenge the accuracy, validity, and verifiability of the credit trade lines appearing in their credit report. It also required that the credit bureau fix any credit listing if it was inaccurate or could not be verified.

In theory, the FCRA mandates the credit bureaus with responsibility to the consumer as well as the credit grantor. In reality, the credit bureaus resist, resent, and reject consumer disputes. The credit bureaus would rather be left alone to make a profit. And, each time a consumer challenges his credit, profit is lost.

The credit bureaus first defend their profits by erecting stockades of stall tactics, including requests for more information, further clarification, and additional identification. The vast majority of consumers give up before they even receive copies of their credit reports. If a consumer manages to get a credit report, decipher the codified information, write a reasoned dispute, and mail it, the bureaus may still find some reason to disregard the challenge. The entire dispute system is designed to frustrate and discourage the consumer.

However, if you manage to submit a valid dispute letter, and the credit bureau investigates your dispute, the chances of success are good - whether or not the negative listings are accurate! Accuracy actually has little to do with the deletion of negative items.

If a credit bureau cannot verify an item before completing its investigation, that item will be removed. Many creditor grantors are simply reluctant to take the time to verify the data. While the credit bureaus may be in the business of reporting credit histories, creditor grantors are not.

At Master Credit Solutions, we are in the Credit Restoration and Education business.  We get astonishing results because we have Attorney Facilitated Credit Repair – in which our Foundation Attorney writes the letters and are sent off on attorney letterhead.  We get results others dream of.

Please visit us at www.mastercreditsolutions.com.

Debt Collectors and Social Media Sites

You know the call. At some stage in your life you’ve probably forgotten to pay a bill or have run short on cash and skipped a credit card payment. So, the collectors start calling. But as fewer people have landlines (about 27% of adults in America use only mobile phones) what’s a collector to do?

The debt collectors (there are 4,500 in the US) want lawmakers and regulators to revamp the way they do business and be permitted to more easily use social media sites such as Facebook, LinkedIn, and Twitter to locate and communicate with debtors. Additionally they want lawmakers to get rid of obstacles so that they will be able to more easily use e-mail, cell phones, and text messages.

Mostly, the Association of Credit and Collections Professionals (ACA) want rules to more clearly explain how collectors can communicate and make use of electronic media. Existing rules and laws don’t address the way to properly use voicemail, text messaging, or cell phones.

The ACA also is looking to curb consumer complaints. A flood of complaints (some 140,000 recently) have been made about collection agencies. Some complaints were made about collectors who used social media in a deceiving way to gain access as well as harass some debtors. Some cases have even landed in court.

Changes to the way debt collectors operate are likely to be made soon as debt collectors are coming under the oversight of the new regulator, the Consumer Financial Protection Bureau. Before, the industry was regulated by the Federal Trade Commission.

The Rights Protecting You from Collection Agencies

10 Rights Protecting Consumers

You will find 10 major areas in the Fair Debt Collections Practice Act that safeguard your rights. Read this information thoroughly. It's going to arm you with practically everything you need to know in order to end any unlawful debt collection methods you might be battling. The end result is that just because you owe money, that doesn’t give debt collection firms the authority to treat you unfairly. Here I will discuss the 10 safeguards for consumers:

1. How Debt collectors Track You Down

2. How A Debt Collector Cannot Communicate

3. Prohibitions Against Harassment or Abuse

4. Untrue or Misleading Representations

5. Unfair Procedures

6. Affirmation of Obligations

7. Multiple Debts

8. Legal Action By Debt Collectors

9. Supplying Certain Misleading Forms

10. Civil Liability

1. How Debt collectors Track You Down

This area in the law is formally called “Acquisition of Location Information.” It comes from the US Code Title 15, 1692b. It essentially limits what debt-collectors can legally do to find you. For instance, debt collectors:

1.        Can’t tell third parties, such as your boss or neighbors that they’re trying to reach you in regards to a debt.

2.        Shall only tell others that they’re looking to confirm or correct where you are (and never mention your debt) Cannot communicate with anybody else (like your boss) more than once, unless the debt collector believes the location information given was erroneous or incomplete

3.        Are not supposed to mail you anything via postcard, either at home or at your place of employment

4.        Can’t use any kind of mailing, envelope, or other communication that would let another person know that the business is a debt collection agency

5.        Are prohibited from contacting you once you notify them in writing that you are represented by an attorney and give them the attorney’s name/address.

2. How A Debt Collector Cannot Communicate

This area of the law prevents debt collectors from hounding you or attempting to embarrass you by telling others your personal business. The law states that debt collectors:

a.        Can’t communicate with you before 8 a.m., or after 9 p.m. ( local time) unless you let them have permission or they have a court order to do so.

b.       Can’t contact you if you’ve notified them a lawyer is representing you

c.        Can’t call you on the job if you tell them that your employer prohibits you from receiving such calls

d.       Can’t talk about your situation with anyone: not your friends, relatives, neighbors or co-workers. The only people they can discuss your debts with are your attorney, the original creditor and credit reporting agencies.

3. Prohibitions Against Harassment or Abuse

No debt collector is lawfully allowed to harass, abuse or oppress you - under any circumstances or conditions, in any way. Any of the following tactics are violations of the Fair Debt Collection Practices Act:

a.        The use of violence, or even the threat of it, or any criminal action that would hurt a person’s body, property or reputation

b.       Obscene or profane language (verbal or written)

c.        Publishing any lists (except to the credit bureau) that shows consumers who refused to pay a debt

d.       Threatening or in fact posting the debt for sale to another party as a way to compel payment

e.       Constantly calling someone on the telephone or engaging a consumer in repeated conversations with the intention to annoy, abuse or harass someone.

4. Untrue or Misleading Representations

Collection agencies are prohibited from making false or deceptive representations to consumers in the course of trying to guarantee debt repayment. Some violations of the law in this area involve:

a.        Wrongly stating or implying the debt collector is bonded by, or associated with, any federal or state government entity

b.       Wrongly representing the nature of any debt, the amount owed, the legal status of the account, or settlement paid to the collection agency for recovering the debt

c.        Falsely declaring that the debt collector is an attorney or represents an attorney

d.       Falsely saying that you will be locked up or arrested in the event you don’t repay what you owe (debtors’ prisons don’t exist anymore in this country)

e.       Wrongly representing your failure to pay could result in your wages being garnished, your property being seized, or your possessions being sold - unless such procedures are lawful, and unless the debt collector actually intends to take those measures

f.         Falsely stating such misinformation as the documents they send to you represent a legal process or that the debt collector works for a credit bureau

5. Unfair Procedures

No debt collector may use dishonest or unfair method of causing you to pay your debts. The following actions are deemed to be violations of the law:

a.        Collecting any money at all - for example interest, late charges or charges apart from the principal amount - unless it is specifically permitted legally and/or authorized by the agreement that created the debt

b.       Acquiring post-dated checks from you that are greater than five days away, unless the debt collector informs you a maximum of 10 or fewer than three business days before depositing the check.

c.        Soliciting postdated checks for the purpose of threatening or instituting criminal prosecution

d.       Depositing or threatening to deposit any postdated check before the date of the check

e.       Making collect calls to consumers, or doing anything that would cause debtors to incur charges for communication by debt collectors that are attempting to conceal the purpose of their contact

6. Affirmation of Obligations

As a consumer, there is a right to verify, authenticate or challenge any debt you are told about, within a given time frame. Within five days of originally getting in touch with you, a debt collection agency must:

a.         Send you a written notice that contain the amount of your debt, the particular creditor, a statement informing you of your right to contest it within 30 days, and a statement indicating that if you contest any portion of your debt, the debt collector will obtain verification of the debt and mail it to you. This is known as a Dunn Letter.

b.       Supply you with the name and address of the original creditor, if different from the current creditor (if you ask for these details in writing)

c.        Cease collection attempts in the “verification of debt” period, if you dispute your debt or request the name and address of the original creditor.

7. Multiple Debts

The law safeguards your repayment rights when you owe numerous debts to creditors. In this case, debt collectors:

a.        May not apply any payments you make to any debt which you dispute

b.       Must follow your instructions about how precisely you want debts repaid (i.e., which debt should be paid first on the outstanding balances).

8. Legal Action By Debt Collectors

Federal law limits where debt collectors may bring legal proceedings against consumers who owe money. Generally speaking, any debt collector initiating legal action shall:

a.        Bring legal action against real property only in the judicial district or similar legal entity where the property is located

a.

b.       Barring the above provision, debt collectors can bring action within the judicial district where the consumer signed the contract or in which he/she presently lives.

b.

9. Supplying Certain Misleading Forms

Debt collection agencies are banned from supplying you with misleading or deceptive forms in a bid to make you pay the money you owe.

The Fair Debt Collections Reporting Act states that it is unlawful for:

Debt collectors to design gather or furnish any form knowing that such a form would produce a false belief or a false impression that anyone other than the debt collection agency is taking part in the collection action (for example, debt collectors can’t falsely claim lawyers or government agencies are involved).

10. Civil Liability

When collection agencies break the law, they can be sued for failing to |follow federal rules, and made to pay:

a.        The actual damages sustained

b.       Additional damages up to $1,000 (for an individual) The lesser of $500,000 or 1% of the debt collector’s net worth (when it comes to a class action lawsuit)

If you believe a debt collection firm has violated any one of these laws in dealing with you, report the organization at once to your state Attorney General’s office as well as the Federal Trade Commission at www.ftc.gov or 877-FTC-HELP.

As a consumer, you must stand up for yourself when dealing with debt collectors. You might owe money, however that doesn’t allow them harass.   Tip: in the event you agree to payment arrangements, never mail postdated checks to a collection agency. Rather, send in money orders. Debt collectors have been known to deposit checks earlier than arranged, or to “accidentally or intentionally” debit your checking account for an amount higher than what was agreed.

Debt Collectors - Lie, Damn Lies and Myths

		If you’ve had to deal with debt collectors, you know that a lot of them can be quite persistent, rude and even downright annoying. But exactly how do you know if a debt collector is flat-out lying to you or misrepresenting the facts simply to have you fork over some cash? It’s not always easy to separate truth from fiction with regards to aggressive bill collectors. Debt collection agencies train their collectors to do everything possible to collect a debt and close out an account as rapidly as they can. Sometimes, unfortunately, the unscrupulous ones may even tell you bald-faced lies in an effort to scare you or quickly pull money from your pockets. Debt collectors are usually well-trained people who deal with hundreds of cash-strapped consumers each and every month. Consequently, they know what questions to ask, how to intimidate you, and what buttons to push, in order to get what they want. In light of these facts, it’s vital that you be familiar with the tactics debt collectors often use, including the lies that lots of them are trained to tell. This is a look at many of the most common lies creditors will tell you.
		Lie #1: “Paying off your debt immediately will improve your credit rating.” The Truth: Negative references like “was in collections” or “was Ninety days past due” will still remain on your credit report, despite you pay off an account in collections. Within the Fair Credit Reporting Act, negative information such as late payments generally stay on your credit files for seven years from the date of the last payment. So paying off your debt after being prompted by a bill collector is not going to have a very positive effect on your credit history. The exception to this rule: You might be able to boost your credit rating if you get an agreement in writing upfront from the creditor or collector that they'll eliminate all negative information from the credit history.  Sadly, most consumers don’t work this out when dealing with collectors. As soon as you’ve paid what you owe, you’ve lost a lot of leverage to have the debt collector delete negative information from your credit files.
		Lie #2: “If you just send me a post-dated check, this issue will quickly go away.” The Truth: Any “agreements” you’ve made over the phone in which the debt collector says they will accept a post-dated check rarely work out to your benefit. You simply don’t know what’s going to happen with that check, and you’re also revealing your bank information and address by sending them the check. Collectors have been known to cash post-dated checks sooner than agreed to, to modify the amount of a payment on a check, and also to later tap into people’s bank accounts once the bill collector has someone’s account information. So don’t agree to send any post-dated checks. Send payments using a money order or certified check, return receipt requested - not via your personal checking account.
		Lie #3: “Maybe I can help you explain your situation to a family member or friend who can loan you the money?” The Truth Debt collectors who use this tactic are not trying to “help you out.” Rather, they’re equipping themselves with very private information. They’re searching for your closest relatives and friends in case they ever have to contact these people to track you down. Additionally, by asking questions like: “Don’t you have a relative who is able to loan the money?” collection agencies want to force you into paying money just don’t have. Refuse to engage in this type of dialogue altogether and simply state: “I've exhausted all my options and have no other available funds from any sources whatsoever.” Avoid revealing any details about your existing financial circumstances. Don’t answer questions about where your bank accounts are, just how much you've got in the bank, whether or not you’re working, or how much you earn.
		Lie #4: “If you don’t pay immediately, we’re going to take you to court or garnish your wages.” The Truth Under the Fair Debt Collection Practices Act, creditors can’t legally threaten to take you to court if they have no aim of doing this. They also can’t haphazardly garnish your earnings. Wage garnishment only happens by a structured legal process. If a collector does pursue a court judgment against you, you will be given notice about the court date and will have the opportunity to present your side to a judge. If you decide to challenge a debt, or simply don’t have the funds to pay, don’t get overly worked up by legal threats. In many cases, these are empty threats and pure posturing on the part of collection agencies.
		Lie #5: “I don’t have to prove anything. I’m calling because you owe a debt – and you know it!” The Truth: If a collector calls you out of the blue claiming you owe a debt and you’re not certain that you do, you should challenge it within 30 days and ask them to validate your debt. Under Section 809 of the Fair Debt Collection Practices Act, you have the right to send a bill collector a “debt validation” letter requesting additional information about the debt you are being told is still outstanding. This is essentially a dispute letter that prompts the bill collector to send out you proof of debt in the form of a complete payment history, a copy of the initial loan agreement or credit card application, and proof that the company contacting you truly owns the debt or has been assigned the debt. While many bill collectors will send these records out to you within 5 days of receiving your letter, some may send you inadequate, insufficient or incorrect information. Others will flat out disregard the law and fail to provide proof of the debt. If a debt collector tells you “I don’t have to prove anything at all!” simply hang up the phone on him and cease all contact with that individual.
		According to the Federal Trade Commission, any creditor who can’t validate a debt: Is not allowed to collect the debt, Is not legally permitted to contact you about the debt, and Is not permitted to report it to the credit bureaus. Doing so is a violation of the Fair Credit Reporting Act and gives you the right to sue for $1,000 in damages for each and every violation of the Act.
		Lie #6: “We’re going to embarrass you by letting your family members, friends and even your employer know about your unpaid debt.” The Truth  Again, the Fair Debt Collection Practices Act provides you with 10 different rights in an effort to protect consumers. One of them is the right to be free from harassment, intimidation and embarrassment by debt collectors. So debt collectors do not have the right to spread your individual business publicly, or share information about your debts with family and friends or your workplace. Should they, report them quickly to the FTC as well as the Better Business Bureau.