Great advice

From the American Chronicle, here are 5 things to do when credit card companies start threatening you.

One of the things a lot of people get confused about in regard to the Fair Debt Collection Practices Act is that the FDCPA doesn't apply to original creditors.* It only comes into effect when a third-party debt collector or junk debt buyer contacts you. The original creditor you borrowed from is free to threaten you and be generally more abusive than a third-party debt collector. When they call, the advice linked to above is very useful. You don't have to be so cooperative when a third-party debt collector makes threats.

*The exception to this is when the original creditor uses a different name. If they do that, by law they're a third party collecting a debt on behalf of someone else (their true name). A collector working for your creditor is only exempt from the FDCPA if s/he uses the creditor's name and states that s/he is employed by the creditor.

Comments

[Richard Nikoley]

Jeff:

It also applies to debt-collection "law firms," even when they send all their fancy court pleadings (often in advance of actually filing them, as a scare tactic).

Also, on the matter of original creditors, some states, like California, have state FDCPAs that hold original creditors to the same (or tougher) standards than the federal law does for third-party collectors.

[Jeff Michael]

Thanks for the pointers, Richard. I've had a lot of clients who were told by collectors "the FDCPA doesn't apply to us," presumably because they were collecting as an employee of the original creditor. So while the federal law may not have applied, state laws may have (in this case they did because it was California).

Collectors lie, frequently, and they're pretty ballsy about it, in my experience. You really have to know your rights before dealing with them. BCS Alliance has a collection of links to the various state laws regarding fair debt collection:
http://www.bcsalliance.com/y_debt_statelaws.html

[Steve "The Debt Settlement Man" B]

If you want some more great info on debt collection practices check out that resource. There are certain things they can and cannot say and by hiring a attorney you can get them to stop calling by law