I know the title seems deceiving, but let me be clear I’m not advocating for consumers not to pay any outstanding debt obligations that they may owe. But I am advocating how consumers can fight debt collectors who use illegal tactics to collect on an outstanding debt. Many consumers do not understand what rights they are entitle to when their outstanding credit card obligation get in the hands of a debt collector. Consumers who have or had a debt collector to either write or telephone them should know the laws that have been put forth by the Federal Trade Commission to protect consumers. Now before I go into what those laws are, which have been created by the FTC, let me explain the process that occurs before a consumer credit card account is handed over to a debt collector.
2012 Current debt statistics
According to the Federal Reserve Consumer Credit Report in March 2012, Americans have accumulated credit card debt in the billions. With so many Americans accumulating more credit than they can manage, some of these individuals with face the harsh reality of defaulting on their debt obligations. When a consumer defaults on their credit card account, the account has not been paid on in more than 120 days. When that occurs the credit card issuer will consider the CC account charged off. Credit card issuers who have charged off accounts on their books, will write those accounts off at the end of the year. The credit card accounts that are written off will be sold to a debt collecting company. The role of the debt collector is to purchase all defaulted debt from the credit card company. Since the credit card company has written the debt off at the end of the year as bad debt, they will no longer receive any income from those accounts. In order for the credit card company to be compensated and receive some type of income from those defaulted accounts, the CC sells the charged off accounts to debt collectors for a profit. When a debt collector purchases a consumer cc account to collect payment, the debt collector is not entitled to the same rights as the credit card company that issued the credit card. For example when a consumer is issued a credit card, a legal contractual agreement is created between the credit card company and the consumer. If the legal contractual agreement is assigned to the debt collector, the debt collecting company will have to prove their assignment of the contract through the debt validation process, which I will discuss later.
FTC and FDCPA
At the beginning of the article I discussed that it important for consumers who are being harassed by debt collectors to know their rights. The reason why I want to emphasize its importance because there are laws within the Federal Trade Commission (FTC) that have laid out what a debt collector can and cannot do to collect on a debt. Within the FTC is the FDCPA which is a consumer protection agency that provides legal protection to consumers to prevent harassment from debt collectors. The FDCPA main purpose is to prohibit debt collectors from using abusive, unfair, or deceptive practices to collect from consumers. The FDCPA also provides legal protection to consumers to prevent harassment from debt collectors. Now in Part II I will discuss what parts of the FDCPA consumers can use as a defense to fight debt collectors.