Charles Chump bought a schlockmobile from a disreputable used-car dealer. Later, after an accident left the car a "molten mass of metal," Chump was unable to meet his car payments. The Marquis de Sade Collection Agency was assigned to collect his debt and started pestering him by calling him where he worked.
Has Charles been "legally wronged" by the telephone calls to his work place? Is there a law to prevent the collection agency from harassing him? What if he loses his job?
Charles Chump is not real. He is a fictional character created by Valerie Vanaman, a former Legal Aid Foundation lawyer, to help teach a group of lawyers some principles of consumer law. The lawyers were given the free lessons at USC recently in exchange for their promise to donate 10 hours of legal services to indigent clients of the local Legal Aid Foundation.
The lawyers learned that there are two basic laws that protect consumers from collection agencies, the federal Fair Debt Collection Practices Act and a similar California law embodied in the Civil Code.
Federal Law Application
The federal law only applies to collection agencies that collect consumer debts for others, but the California law applies to everyone who engages in such debt collection in the ordinary course of business, even if it is on one's own behalf. There is one significant loophole in both laws. The regulations, which prohibit harassment and other abusive practices, do not apply to lawyers who are collecting debts of their own or for others.
Here are some of the practices that are prohibited in the out-of-court collection of debts for household, family or personal purchases made on credit.
A debt collector may not use obscene or profane language.
A bill collector may not keep your phone ringing to annoy you or call you after 9 p.m. or before 8 a.m.
A debt collector may not pretend to be a law-enforcement officer or falsely suggest that he is affiliated with a government agency.
A collector cannot threaten physical violence if you don't pay up.
A debt collector cannot threaten to or actually tell your neighbors that you're a deadbeat, that you didn't pay your bills.
Lawyer in the Middle
If you tell a debt collector that you are represented by a lawyer, he must contact you through your lawyer and not bother you personally.
A bill collector cannot pretend that he has commenced legal proceedings against you and cannot threaten to seize or sell your property if there is little chance that such action will be taken.
A debt collector can only call your employer once to verify your employment, but otherwise telephone calls to your employer are severely restricted.
If your mother-in-law or any other family member answers your phone, the collection agency cannot provide information to them about your outstanding debt unless the agency has already obtained a court judgment against you.
There are also general restrictions against debt collectors doing anything to "harass, oppress or abuse" any person in connection with the collection of a debt. What those words mean may be open to interpretation, but in one case, a court ruled that a letter threatening to send out an investigator to the debtor's neighborhood and to make an "embarrassing" call on the debtor's employer constituted unlawful abuse.
A Powerful Right
It is a misdemeanor in California for a collection agency or even an attorney to simulate a legal or judicial notice in order to collect a debt. In other words, if a bill collector sends you a dunning notice that looks like it is authorized or issued by a court or government agency, when it is not, he has committed a crime punishable by up to six months in county jail and a $2,500 fine.
One of the most powerful rights you have under the federal law is to force the debt collector to stop most routine collection communications with you. All you have to do to get him to stop is to tell him to stop in writing .
Under Section 1692 of Title 15 of the United States Code, once you tell the collector in a letter that you are refusing to pay the debt or that you want further communication to cease, the bill collector must halt its routine collection efforts, leaving only specific legal remedies to pursue. Keep a copy of the letter and be sure to mention the specific section of the U.S. Code.
Right to Sue
If you think a collection agency may have violated the law while trying to collect a debt, you have the legal right to sue for damages. These damages may include your psychological distress resulting from the unlawful conduct. Or if you lost your job because of an improper call to your boss, your damages may include your lost wages. If the violation is willful, the court may award punitive damages of up to $1,000 for each violation.
If you think you have a legal claim, you should consult an attorney. The Los Angeles County Bar Assn. operates a lawyer referral service, which you can reach by calling (213) 622-6700.