This post comes to you on the Sunday before the national election for the United States president. Happy Halloween! Today we examine areas that are likely to impact many homeowners and consumers in the coming weeks and months: the CARES Act and debt collection.
I’ve written earlier this year about forbearance with the CARES act and how it may or may not be the correct strategy for a homeowner. Recently I’ve explained how the CARES act can stop a Sheriff sale, stop foreclosure, and be used to prevent any judgment against you for up to one year on a federally backed loan. Whatever your situation, know that there are options available to you. You must understand and exercise your rights. I hope to be that resource for you in the days ahead.
- Look at this post for more information about how how the CARES Act protects you against forbearance violations. If you feel you have a problem with forbearance, please reach out, and I will look at your situation in a no-charge strategy session.
- And finally, this post deals with using a CARES Act forbearance to stop a Sheriff sale, stop foreclosure, or stop a judgment from proceeding against you if you hold a government-backed loan. As of this writing, Three Counties have activated their Sheriff sale units in New Jersey: Bergen Morris and Ocean counties.
Debt Collection on the Rise
The debt collection industry is booming right now. There are forbearances of mortgage debt, student loan debt but not credit card debt.
In this recent post about how identity theft is a crime of fraud, I was very clear about how to deal with errors on a credit report. It is the debt collectors’ responsibility to conduct their business properly. By no means should a consumer expect a company such as a debt collector always to get it right. Unfortunately, accuracy is not a hallmark of some of these businesses. For that reason, there are many cases of debt collectors trying to collect a debt not owed. Using methods against the law and otherwise profiting from reasonable consumer faith attempts to handle the situation on their own.
It is up to the consumer to regularly check their credit report to ensure no problems have arisen from identity theft fraud or error.
Debt Collector Harassment and Errors
Harassment can take many forms. It’s important to know that there are compensatory damages that a consumer can collect for having been harassed by a debt collector and for errors.
The Consumer Finance Protection Bureau (CFPB) is a watchdog government agency that will take the information down of your complaint and report it to the person trying to collect that was the source of the error. Once contacted by the CFPB, hopefully, the problem is resolved.
The difference between these two paths is that the consumer can collect statutory damages for the debt collector not conducting business properly in the case of the first one. If a consumer files a complaint to the CFPB, the CFPB does not act on the consumers to collect compensatory damages.
The only way to do that is to get a consumer rights attorney who will notify the debt collector of the violations under the law and make a case for enforcement to the court. A reasonable consumer rights attorney will sue the debt collector and their lawyers if appropriate. In many cases, only the debt collector is held accountable for any misdeeds and trying to collect a debt, but their law firm may represent them in a case.
Three Laws that Work to Protect the Consumer
The statutes that impact the consumer are the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), and the Telephone Collections Practices Act (TCPA). All three of these laws work together to protect the consumer.
Consumer protections include:
- False information on credit reports that can negatively impact your ability to live the lifestyle that you want,
- How debts are collected,
- How you were notified in writing,
- Contents of that correspondence,
- Verification of the debt and,
- If that debt is owed.
The Telephone Consumer Protection Act
The Telephone Consumer Protection Act (TCPA) controls how a debt collector may contact you via the phone. The TCPA covers a large area of abuse and harassment specifically about phone calls. Behavior by debt collectors as their efforts to locate the person owing the debt, inform them of the debt, and then attempt to collect the debt is the bread and butter of their business. The TCPA is specific about who, what, when, and how to talk to consumers on the phone about a debt. Violations of these things result in statutory and compensatory damages.
Fee-Shifting for Attorney Expenses
The biggest thing that a consumer needs to know about Consumer Laws IS THEY ARE FEE SHIFTING. The FCPA, FCRA, and the TCPA – all of these laws have fee-shifting.
Fee-shifting enables a consumer to retain a lawyer to represent them in these matters without incurring expenses for attorney fees. When the consumer rights attorney wins the case, the debt collection pays all fees.
That means that if you have a claim, YOU CAN SUE. You don’t come out of pocket for the best attorneys you can find; we make the banks and the creditors and the debt collectors pay.
Debt collectors are miserable to deal with … anyone and everyone who has been in the situation where they are behind on a debt – those calls and letters are awful. If you have questions, reach out to me! I can tell you whether the debt collector is violating the law …
… and … I can tell you how we are going to sue them, and make them pay, if they are violating the law. No more guesswork or worrying about how to deal with these people. I will spend the time to listen, give you solid, straight advice and you can take it from there. Good luck. Be tough and smart. I hope we talk soon.
