Beware of Crooked Debt Collectors

Scared man

The Federal Trade Commission has been on a hot streak recently in obtaining judgments against dishonest debt collection agencies, resulting in restraining orders halting operations and ordering repayment for affected consumers

These judgments highlight some of the practices of shady debt collectors including intimidation, threats of arrest, harassment, and misrepresentations of the collectability of the debt itself. In the worst cases, debt collectors in Illinois and New York employed these methods to collect non-existent debts from unsuspecting persons. A company using the name of K.I.P. LLC and went so far as to try and collect on non-existent loans. How does this happen? Along with financial services, these companies are also in the business of selling the data of borrowers and also loan applicants. A company like K.I.P. LLC can buy the applicant’s personal information and then has enough material to trick a consumer into believing a financial relationship exists. When they call on the phone, they know your address, employer, social security number, everything. It is no wonder they were successful enough to now have to disgorge $6.4 million in ill-gotten gains.

Let’s review some of the fundamentals of debt collection law to avoid becoming a victim of the next iteration of this scheme:

The federal law that governs debt collection agencies is the Fair Debt Collections Practices Act (FDCPA). It requires that debt collectors make certain disclosures up front and that they work to verify the accuracy of any accounts that they collect on. Collectors may not make false representations, charge unrelated fees or ignore your instructions regarding how you wish to be contacted. An honest debt collector will never threaten you with arrest or seizure of assets.

If you have concerns or complaints regarding a debt collector you can register them with the FTC and you should speak with an attorney to advise you of your rights immediately. If you have legitimate debts that need to be settled, contact Nielsen Law Group today to schedule your free consultation. Call (480) 888-7111 or submit a web request here.

Tagged in , , ,