CFPB Says 30 Million Americans Subject to Debt Collection Schemes, Scams & FDCPA Violations

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The past five years have been tough for the many Americans who have lost their jobs, lost their homes or have had to rely on credit cards to make ends meet.  The result, according to the Consumer Financial Protection Bureau (CFPB), is that approximately 30 million Americans are currently subject to debt collection – much of which involves schemes, scammers and practices that violate the Fair Debt Collection Practices Act (FDCPA).

$12 Billion in Past Due Debt

According to the CFPB, there are approximately 4,500 debt collection firms in the United States attempting to collect over $12 billion in past due debt.  While those are sad statistics, they’re likely viewed as an “opportunity” by third-party debt collectors – most of whom will go to any length to collect on these debts.  Many of the tactics these schemers and scammers use are unethical and violate the FDCPA. Some tactics are bizarre.

Debt Collectors Dress Up Like Sheriffs, Judges & Create Fake Courtrooms

The above may sound crazy, but it’s true.  According to Pennsylvania’s Erie Times News, debt collection company Unicredit America, Inc. allegedly turned its offices into a fake courtroom, created a raised bench for a fake judge, a witness stand for fake witnesses and a gallery for fake spectators.  It also installed shelves to house fake law books.

The scam, which affected hundreds of people, didn’t end there.  Unicredit issued fake subpoenas that ordered consumer debtors to report to the fake courtroom with financial documents such as bank statements, retirement accounts and vehicle registrations.  If consumers came with a lawyer, the trial was mysteriously “cancelled.”  If they failed to appear, they received the following letter from a fake judge that informed them that they would be arrested:

I shall have no alternative but to request from the Court of Common Pleas of Erie County to have the Sheriff attach you personally (physically take you away) for your appearance before the Judge to answer to the Court for your disobeying the Subpoena issued by the Prothonotary (a clerk of the court) and lawfully served upon you.

Luckily, the scam didn’t last very long, and the company agreed to stop, reimburse consumers and pay substantial fines.  However, it does show the lengths that third-party debt collectors will go to collect on a debt.  They all want a piece of that $12 billion.

What Third-Party Debt Collectors Cannot Do

Using false names, threatening to arrest you and pretending to be a police officer, lawyer, judge or government employee are all strict violations of the FDCPA.  Others include:

  • Attempting to collect more debt than what is actually owed.
  • Harassing you by phone calls, which includes calling you at work, calling you early in the morning or late at night and calling your friends, neighbors and co-workers.
  • Harassing you by email, letters or text messaging.
  • Harassing you, intimidating you, lying to you or using obscene language.
  • Making anonymous calls.
  • Threatening you or your family with violence.
  • Threatening to garnish wages.
  • Using social media sites such as Facebook, Twitter and LinkedIn to harass you.

Debt collectors who violate the FDCPA can be held liable for statutory damages of up to $1,000, actual damages you may have suffered, attorneys’ fees and court costs.  Imagine turning the tables and collecting from them instead. If you’ve been harassed, contact an experienced debt collection lawyer to find out more about FDCPA violations and damages.