PITTSBURGH — After more than a decade of eluding phone calls, a Brighton Heights man said his experience with a third-party collection agency hired to recoup his student loan debt went from marginally annoying to borderline cyber stalking.
Even for loan scofflaws there are rules collection agencies must follow, and two government agencies are working to make that better known.
Clarifying that laws outlined in the Fair Debt Collections Practices Act of 1977 also apply to collection attempts made through digital media has been a priority for the Federal Trade Commission and Consumer Finance Protection Bureau, said Christopher Koegel, assistant director of the FTC’s Bureau of Consumer Protection’s financial practices division.
For example, full and honest disclosure of identity and the intent to collect a debt is mandatory for collection agencies.
It also prohibits contacting third parties without prior consent from the debtor or a court unless they’re seeking location information for the debtor. The act bans disclosing debt obligations to third parties; contacting debtors after 8 p.m. and before 9 a.m.; directly contacting consumers who have attorneys handling the debt; making any false or misleading statements; using obscene or profane language; and using threats of violence to collect.
Individual debt collectors found in violation of the act could face fines of $1,000 per violation — money that goes directly to the debtor.
A 2014 report says last year the commission received 204,464 debt collection complaints, up from 202,616 in 2012. Thirty-eight percent involved collectors misrepresenting the type of debt, amount or status; 19.7 percent were failure to identify as a debt collector and 16.6 percent involved repeated calls to third parties.