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Debt Collection and Credit Reporting Issues Impacting Seniors
JAMES A. FRANCIS
Francis & Mailman, PC
Land Title Building, 19th Floor
100 South Broad Street
Philadelphia, PA 19110
Phone: 215-735-8600
Fax: 215-940-8000
E-mail: [email protected]
www.consumerlawfirm.com
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Why seniors may be subjected to unlawful debt collection and credit reporting practices
o Rampant Abuse in Collection Industry o FTC receives more complaints about debt collectors
than any other industry, 140,036 in 2010o Bad Debt Buying Industry has explodedo Seniors perceived as vulnerable and having access to
income, even though may be fixed;o Often credit inactive
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o Federal laws which prohibit unfairness, deception and harmful tactics by debt collectors and credit reporting industry
o Mandatory attorney’s fees provide for free/no cost representation by private lawyers;
o Can recover $1000 statutory damages under FDCPA, plus any actual damages, FCRA actual damages
o FDCPA “strict liability”statute/FCRA very specific as well
Two Important Laws that Protect Seniors and Consumers Generally: Fair Debt Collection Practices Act and Fair Credit Reporting Act
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o FTC and its website;
o Consumer Financial Protection Bureau (CFPB)
o Senior Law Center
o Private lawyers/consumer advocates who will usually work on a contingency;
o www.creditreportproblems.com
Resources Available To Seniors and Free Legal Help/Assistance
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o Repeated, harassing and abusive phone calls;
o Contacting family, neighbors and 3rd parties to embarrass consumer into paying debt;
o Lies/deceptions/misrepresentations—too many to list
o Reporting debts on credit report that are prohibited
Common Unlawful Collection Practices
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o FDCPA prohibits harassing and abusive communications generally
o No calls before 8AM or after 9PM o Right to demand verification/validation of a debto Right to impose “cease and desist” on
communicationso The Telephone Consumer Protection Act, its
applicability, cell phones and the Do Not Call List
STOPPING REPEATED AND HARASSING PHONE CALLS AND LETTERS
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Date
Your Name
Your Address
Your city, state, zip code
Name of Collection Agency
Address
City, state, zip code
Dear Sir/Madam:
After being contacted on numerous occasions by employees of your agency, I am writing to demand that you cease and desist contacting myself or anyone else regarding this debt and in the future only contact me through US Mail. I also request that you send written verification that I owe this debt to your company.
Sincerely,
(sign here)
Your name
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SAMPLE CEASE AND DESIST LETTER
o FDCPA prohibits debt collectors from speaking with 3rd parties about a debt except for “location information”
o FDCPA prohibits calls to the workplace/employer if debt collector knows consumer cannot take calls there
Stopping Contact with 3rd Parties
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o Consumer will be arrested or go to jailo Threatening to sue or suing on old debtso Social Security income is attachableo “Sheriff is coming” to take house, cars or other propertyo Senior liable for debts of children/family members
Client Seena Rosenberry case and the CBS story
o Children/family liable for debts of senior o Senior liable for medical billing/Medicare submission errorso Debt will be reported on credit report even though old
Common Lies and Misrepresentations Punishable Under FDCPA
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o Reporting false or otherwise prohibited information on consumer’s credit report
o Both FDCPA and FCRA prohibit false credit reporting
o Increasingly utilized tactic because of the “leverage” and pressure it creates and growing consumer awareness
Misreporting Debts/Account Information
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o Reporting negative information after 7 years/Debt Reaging
o Reporting account without noting that it has been disputed by the consumer
o Reporting prohibited information about medical bills/procedures (including reimbursement submissions)
Frequently Violated Credit Reporting Prohibitions
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o Debt Collector buys delinquent or past due account that is older than 7 years
o Age of debt relates to “date of first delinquency”
o Debt Collector assigns the date of collection as the date of first delinquency, reaging debt another 7 years;
Debt Reaging: A Common Practice With Collection Accounts
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o FDCPA section 1692g
o FDCPA section 1692e(8)
o FCRA section 1681i and 1681 s-2(b)
Broad Dispute Rights Under FDCPA and FCRA
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o DC must advise consumer of right, and specifics of the debt (clearly outline the debt and creditor to whom owed)
o Within 30 days of first communication from a debt collector, and within writing
o Gives consumer right to demand that debt collector provide
verification or “proof” of the debt
o Debt Collector must cease collecting during verification period
FDCPA 1692g Dispute: Validation/Verification
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o Prohibits debt collector from reporting the debt to anyone, including a credit reporting agency without noting its disputed status
o Dispute can be orally or in writing
o Failing to note the disputed status an automatic violation;
FDCPA Section 1692e(8)
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o Apply to credit reporting agencies and creditors, not just debt collectors
o Require both to conduct an investigation of the consumer’s dispute, and failing to do so allows consumer to sue for damages
o Dispute MUST be made to the CRA
o Even if the investigation results in verification of the debt/account, must still report disputed status
FCRA Sections 1681i/1681s-2(b)
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Date
Your nameYour addressYour city, state, zip code
Name of CRA and/or furnisher [Equifax, Experian, Trans Union]AddressCity, state, zip code
Dear Sir/Madam:
After reviewing my credit report, I am writing to dispute the following inaccurate information. I am listing each item along with the way it should be corrected:
[Account name] [Account number] [How it should report/Why it’s inaccurate*]
Supporting documents have been enclosed. Pursuant to the FCRA, please forward them to the credit furnishers. If you are not going to forward them, please inform me so I may do so myself.
Sincerely,
(sign here)
Your nameYour Social Security NumberYour Date of Birth
Enclosures: (list what you are enclosing – examples: police report, fraud affidavit, proof of payment, etc)
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SAMPLE DISPUTE LETTER
o Use of someone’s name and personal identifying information to buy goods, obtain money and use credit
o Seniors sometimes targeted because often not credit active
The Role of Identity Theft. What is it?
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o Secret Credit Card Swiping
o ATM Fraud
o Mail left at old addresses
The Most Common Forms and Causes Today
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o Order Credit Report Regularly
o FACTA/FCRA now permits free report once a year from each of the CRAS
o Look at credit history AND inquiries for creditors you don’t recognize
How to Guard Against It
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o Fraud Alerts
o Invoking FDCPA right to demand verification/validation
o Fair Credit Billing Act for Charges
o Right to Disputes to Big 3 CRA’s and debt collectors
What to do if it Happens
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