The relatively new Consumer Financial Protection Bureau has put some useful resources on the Bureau’s website to deal with obnoxious debt collectors. The first thing on this page are links to two new bulletins providing notice to debt collectors of practices the Bureau finds abusive. These things just make kind of fun reading.
The meat of the page are the so-called “Action Letters”. These are form letters developed by the CFPB to help consumers implement their rights under existing consumer protection laws (primarily the Fair Debt Collection Practices Act). These letters serve the following purposes:
- To dispute a debt and request additional information about the debt;
- To dispute a debt and demand that the collector prove that the consumer is responsible for the debt and to stop contacting the consumer until they have done so;
- To restrict the times and methods by which the collector can attempt to contact the consumer;
- To notify the collector that the consumer has retained an attorney and all contacts should go through counsel; and
- A cease and desist letter — this is a letter instructing the collector to stop all contact attempts with the consumer.
These letters are very useful tools, but they do have some downsides. FDCPA disputes almost never produce what you hope they will, and if you really do owe the debt, it will buy you only a brief respite from collection activity. If, however, you are willing to proceed with active litigation against the collector, this kind of verification letter can be extremely valuable.
The most valuable restriction on time and place of contact is preventing the collector from contacting you at work. This can be very effective. It will not, however, stop overly aggressive collectors from calling your employer — just to verify that you really do work there — yea, right.
Attorney retention letters are really better coming from the attorney. Far too often people will tell a collector that they are represented by a certain attorney (whose name they have plucked from the phone book or a website) when they really aren’t, because they have heard that will stop collection calls. Believe it or not, the collectors really will verify this; and you will not be winning friends with an attorney you may need to actually represent you down the road if his or her phone starts ringing off the hook with creditors of a supposed client the attorney has never heard of. Bad plan.
Cease and desist letters basically are a mechanism for requiring that collectors stop all collection contact. It does not mean they can’t sue you. Well, if they can’t call you, they can’t harass you by mail and you aren’t represented by counsel; there really isn’t much left for them to do. Now, not every collector sues upon receipt of a cease and desist letter; and I have clients who have used them very successfully, but only in very specific fact situations.
Finally, at the bottom of this page the CFPB outlines its complaint mechanism for lodging complaints against collectors and creditors. By all means, have at it. In fact, I encourage everyone to investigate the resources available from the CFPB and make use of them. Just be aware of the fact that not everything will do what you expect, and most things do have consequences. Getting a breather from collection calls is not a solution, it is a tool.