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Debt collection firm faces lawsuit from federal government

Firm is accused of filing lawsuits against debtors without verifying facts

A Georgia-based debt collection law firm, which also operates in South Carolina, is facing a lawsuit by the Consumer Financial Protection Bureau, according to Bloomberg Businessweek. The collection firm, which files lawsuits against debtors on behalf of creditors, such as credit card companies, is accused of filing hundreds of lawsuits a day, many of them against the wrong individuals. The lawsuit is a reminder of the harassment debtors sometimes face when dealing with creditors.

Federal lawsuit

The firm is accused by the federal bureau of launching hundreds of lawsuits against debtors, often without verifying important details within those suits. During a five-year period between 2009 and 2013, the firm filed an average of 270 lawsuits a day, or 350,000 in total. Many of the lawsuits were filed on behalf of credit card companies.

The bureau’s lawsuit claims that many of those lawsuits were against individuals who did not have a delinquent debt or whose debt was otherwise of a different amount than what was mentioned in the suits against them. The agency’s lawsuit claims that the firm relied on non-lawyer staff and automated systems to file the lawsuits instead of actually verifying the facts of the suits. Members of the firm are also accused of signing affidavits claiming they had “personal knowledge” of a debt when in fact such claims were untrue. Experts say that if the lawsuit is successful it could lead to significant changes in the debt collection industry.

Dealing with collectors

The story is a significant reminder of the sort of harassment many debtors face by overzealous creditors. As the Chicago Tribune recently reported, harassment by debt collectors is quickly becoming the most pressing issue for consumer protection advocates. The newspaper recommends consumers know their rights under federal law when dealing with creditors.

The Fair Debt Collection Practices Act, for example, bars creditors from calling before 8 a.m. and after 9 p.m., unless the debtor specifically authorizes them to do so. A collection agency also cannot harass or intimidate a person who owes money and they are not allowed to threaten a debtor with jail time if he or she fails to pay his debts. Also, except to find out a debtor’s contact information, a collection agency cannot discuss a person’s debt with anyone aside from the debtor, the debtor’s spouse, or his or her attorney.

Legal help dealing with creditors

Unfortunately, as the above case shows, many debt collectors fail to adhere to the laws and regulations that govern how they must behave when dealing with people who owe money. Creditor harassment is a serious issue and often leads to victims of such harassment feeling fearful and helpless.

However, it is important to understand that people do not have to simply tolerate harassing phone calls from creditors. Anybody who has been the victim of such harassment should contact a bankruptcy attorney right away. Such an attorney cannot only help put an end to the harassment, he can also help people find a pathway that gets them out of debt and back on their feet.

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