Creditor harassment: Memphis-based debt collector fined $1.5 million by FTC

A Memphis-based debt collection agency has been fined $1.5 million over allegations of creditor harassment.

Agency accused of harassing debtors and violating federal law

A Memphis-based debt collection agency has been fined $1.5 million in a settlement reached with the Federal Trade Commission, according to InsideARM. The agency, which will not admit to any of the allegations under the terms of the settlement, was accused of a long list of violations under the FTC Act and Fair Debt Collection Practices Act (FDCPA). The case is a reminder that despite laws against the practice, creditor harassment is still a major problem for many people who face creditor phone calls and contact every day.

Numerous allegations

The FTC accused the agency, which has about a million consumer accounts and is one of the largest debt collection agencies in the South, of numerous violations. Among the allegations was that the agency contacted consumers at work when it knew the employer forbade such calls, telling consumers they owed debts that they in fact did not owe, giving consumers' confidential information to third parties, and withdrawing funds from consumers' bank accounts when they had no authorization to do so.

The agency reached a settlement with the FTC which will see it pay a civil penalty of $1.5 million. The agency will also be required to reform its collection practices. Under the terms of the settlement, if a consumer disputes a debt then the agency must either stop pursuing the debt or suspend collection efforts until an investigation determines the validity of the debt.

Dealing with collection agencies

The problem of creditor harassment is becoming a major one since, as Time recently reported, over a third of Americans currently have a debt in collections. While dealing with collectors is stressful, consumers should know that federal and state laws give consumers rights and protect them from harassment.

Collectors, for example, are not allowed to call before 8 a.m. or after 9 p.m., they cannot call a consumer's place of work if they have been told not to, they cannot threaten to sue or garnish a consumer's wages (unless they actually intend to do so), they cannot misrepresent themselves as lawyers or law enforcement officials, and they cannot harass consumers. Harassment can include verbal abuse, obscene language, or making repeated phone calls.

Stop the phone calls

Of course, the best way to deal with collectors' phone call is to get them to stop outright. Debt collectors, regardless of whether they comply with the law or not, can be intimidating and unwelcome for anybody who is struggling to pay off mounting debt. In many cases, the best way of dealing with debt and putting a stop to creditor harassment is by considering bankruptcy.

By declaring bankruptcy, collectors' phone calls will automatically stop and those collectors must contact the consumer's attorney instead of the consumer himself. For anybody considering such a path, having a qualified and experienced bankruptcy attorney is imperative and will help consumers rebuild their financial lives faster.

Keywords: creditor harassment, debt collector, collection agencies, bankruptcy protection