The law no one knows about

Don McNay

“Don’t leave me hanging on the telephone.”

— Blondie

There is an advertisement continually running on CNBC for a “debt reduction center.” One of the services they advertise is that they will “stop harassing calls.”

There is an easy and free way to get collectors to stop. Just tell them to stop.

Federal law allows you to do that.

One of the most ignored laws in America is the Fair Debt Collection Practices Act. (FDCPA.) It’s been on the books since 1978, but few people know about it.

People are stunned when I tell them they can write a letter and get collectors to stop harassing them.

You can check it out for yourself at: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm

The most important provision allows you to write to a credit card company collector and get them to stop contacting you. It doesn’t make the debt go away and it doesn’t help your credit rating. The credit card company can still sue you, and it might do just that.

But it does stop the phone calls and the harassing letters. It forbids collectors to call your work or call your neighbors.

People need time to organize their finances. People make poor decisions when pressured by collectors. The FDCPA gives people time to think, consult with attorneys and do what is best for them.

There are a variety of other protections, such as not allowing collectors to call before 8 a.m. or after 9 p.m.

There is a whole list of things that collectors are not supposed to do.

They do them anyway. The penalty for getting caught is a wimpy $1,000 fine. And very few people are caught.

You rarely hear about anyone getting caught because the Federal Trade Commission has been a long-time lap dog for the credit card industry.

If you file a complaint against a credit card company with the FTC, you will get a form letter saying they don’t investigate individual complaints because they are out attending to a lot of other, more important duties.

Those duties are unspecified. I’m sure they are important to someone.

I’ve seen all kinds of horror stories. I’ve turned in, or helped others turn in, over a dozen rogue collectors, including one who claimed to have spoken to my dead mother.

I’m still waiting for the first response. Maybe the FTC is waiting for Mom herself to call, personally.

Even though many banks are on government bailout money, credit card companies still have a lot of clout in Washington. Congress allows them to change the terms of credit card interest rates whenever they feel like it.

I can’t think of another business that makes its own rules of engagement. Most of us have to live by the contracts we signed. Not credit card companies.

I try my best to get people not to use credit cards. I have not used one in years. I think people should pay their debts. But even more importantly, I think people and businesses should follow the laws on the books.

I’ve seen many cases of the Fair Debt Collection Practices Act being ignored. Credit card companies are unsecured creditors. They shouldn’t be allowed to intimidate people.

Since few people know the Fair Debt Collection Practices Act exists, they are suckers for these “debt reduction” companies that are flooding the television airwaves with their misleading ads.

I’m watching a commercial now. They say they can “stop harassing phone calls,” which is what people can do on their own. They say they can set up “easy payment programs,” which most credit card companies are willing to do if you work with them.

Thus, the companies want you to pay them for something you can do for free.

A “professional debt analyst” (whatever the hell that is) tells us that “an unresolved credit card problem can lead to wage garnishment, bank account levy, and loss of your home or even bankruptcy.”

Wage garnishments, bank account levies, foreclosures and bankruptcy are legal matters that need to be handled by a lawyer. I can’t find any state or federal agencies that certify a “professional debt analyst.” State bar associations might want to see if holding yourself out as a “professional debt analyst” is an unauthorized practice of law.

If not, is it awfully close. When someone has a legal problem, he needs to find a lawyer, not a “debt resolution center” television advertiser.

If consumers know about the rights they already have, they shouldn’t need the “services” of a “debt resolution center.”

Don McNay, CLU, ChFC, MSFS, CSSC is the founder of McNay Settlement Group in Richmond, Kentucky. You can read his award winning, syndicated financial column at www.donmcnay.com or write to him at don@donmcnay.com . McNay is the author of Son of a Son of a Gambler and the Unbridled World of Ernie Fletcher.

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