Abusive Collection Practices and Protection of Assets
Although a debt may be owed, a consumer has rights under Federal or Florida laws, or both, which regulates the manner by which a creditor, a collection agency or an attorney may seek payment. Regardless of the legitimacy of the claim of an obligation, consumers must be treated with fairly and with respect. Consumers should also be aware of laws which protect certain property from the legal process. The following laws should be helpful to those on the receiving end of high-pressure and often inaccurate collection efforts:
I) FAIR DEBT COLLECTION PRACTICES ACT
II) FLORIDA CONSUMER COLLECTION PRACTICES ACT
III) FLORIDA'S HOMESTEAD AND OTHER EXEMPTIONS
I) The Fair Debt Collection Practices Act - FDCPA - is a Federal law intended
to protect consumers from abusive debt collection activity by collection
agencies, attorneys, and those taking assignment of debt by assignment,
who are all considered "collectors".
Amongst many provisions of the law, the following are examples of what collectors may, and may not, do:
A. When seeking location information from a neighbor or employer, a collector shall:
1) identify himself, state that he is confirming or correcting location information concerning the consumer,
and only if expressly requested identify his employer;
2) not state that such consumer owes any debt;
3) not communicate with any such person more than once unless requested to do so by such person or
unless the collector reasonably believes the first response is erroneous or incomplete and such person
now has correct or complete information;
4) not communicate by post card;
5) not use language or symbols on envelopes indicating the collector is in the debt collection business or
the communication relates to collection of a debt;
6) after the debt collector knows the consumer is represented by an attorney the collector can not
communicate with any person other than the attorney unless the attorney fails to respond
within a reasonable period of time to communication from the debt collector.
B. When
communicating with a consumer a collector shall not:
1) Without prior consent of the consumer or Court permission, communicate
with a consumer under the
following circumstances:
(a) at unusual times or places or a time or place known to be inconvenient
to the consumer, and unless
given notice to the contrary, the law assumes
that 8:00 AM to 9:00 PM local time is convenient;
(b) at the consumer's place of employment if the collector knows
or has reason to know the
consumer's employer prohibits the consumer
from receiving such
communications.
C. Ceasing communication -- If a consumer notifies a collector in writing
that the consumer refuses
to pay a debt, or wishes that the collector stop
communication,
the collector shall not
communicate any further, except to advise –
1) the collector's efforts are being terminated;
2) that the collector
or creditor may invoke specified remedies which are ordinarily invoked
by such
collector or creditor; or
3) the consumer the collector or creditor intends
to invoke a specified remedy.
D. Harassment or abuse of any type conduct prohibited, including:
1) use or threat of use of violence or criminal means to harm the physical
person, reputation, or property of
any person;
2) use of obscene language or language the natural consequence of which
is to abuse the hearer or
reader;
3) publication of the name of the consumer other than to credit reporting
agencies or legally authorized
individuals;
4) advertisement for sale of any debt to coerce payment of the debt;
5) Causing a phone to ring or engaging any person in a phone conversation
repeatedly or continuously with
intent to annoy, abuse, or harass any person
at the called
number, or calling back once told the
person can not speak or has hung
up;
6) making calls without meaningful disclosure of the caller's identification
E. False,
deceptive or misleading representations are prohibited, including:
1) false representation that collector is vouched for, bonded by, or affiliated
with the United States or any
State government;
2) falsifying the type, amount, or status of any debt;
3) falsely making giving impression that the collector is an attorney;
4) making representation or implying that nonpayment will result in arrest
or imprisonment of the
consumer, or making representation the collector
would proceed with the seizure, garnishment,
attachment, or sale of any
property
or wages of any person unless such action is lawful and collector or
creditor
intends to take such action;
5) threaten any action that cannot legally be taken or that is not intended
to be taken;
6) making representation or implying that a sale, referral, or other transfer
of a interest in a debt shall
cause consumer to lose any claim or defense
to payment of the debt or become subject to any practice
prohibited by
the law.
7) falsely representing or implying the consumer committed a crime to disgrace
the consumer;
8) Communicating or threatening to communicate to any person credit information
which is known or
which should be known to be false, including the failure
to communicate a disputed debt is
disputed.
9) use or distribution of written communication which simulates or is falsely
represented to be a document
authorized, issued, or approved by any court,
official, or agency of the United States or any State, or
which creates
a false impression as to its source, authorization, or approval;
10) use of false representation or deceptive means to collect or attempt
to collect debt or obtain information
concerning a consumer.
11) fail to disclose in initial communication with the consumer that collector
is attempting to collect a debt
and any information obtained will be used
for that purpose, and failure to disclose in subsequent
communications
that the
communication is from a collector, but these requirements do not apply to a
pleading
made in connection with a legal action;
12) falsely representing or implying that accounts have been turned over
to innocent purchasers for value;
13) falsely representing or implying that documents are legal process;
14) use of any business, company, or organization name other than the true
name of the debt collector's
business, company or organization;
15) falsely representing or implying that documents are not legal process
forms or do not require action by
the consumer to induce the consumer to
take no
action; and
16) falsely representing or implying that a collector operates or is employed
by a consumer reporting
agency.
F. Using unfair practices of any type - very open ended - is forbidden,
including:
1) collection of amounts unless such amount is expressly authorized
by agreement creating the debt or
permitted by law;
2) accepting checks postdated by more than five days unless consumer
is notified of debt collector's intent
to deposit such check not more
than ten nor less than three business days prior to such deposit;
3) solicitation by collector of postdated check for purpose of making
threats or instituting criminal
prosecution;
4) depositing or threatening to deposit any postdated check prior to
date on such check;
5) causing charges to be made for communications by concealment of
the true purpose of the
communication, and include, but are
not limited to, collect telephone calls and telegram fees.
6) taking or threatening to take action other than Court action to
obtain property if there is no right to
possession of the property
claimed as collateral through an enforceable security interest; there
is no
present intention to take possession of the property; or the
property is protected;
7) communicating with a consumer regarding a debt by post card;
8) using any language or symbol other than collector's address on any
envelope when communicating with
a consumer by mail or by telegram,
except debt collector may use his business name if such name
does not
indicate the collector is in the debt collection business;
G. Giving
warnings about collection activity:
1) a collector must timely provide warnings to the consumer about:
a) the amount of the debt;
b) the name of the creditor to whom the debt is owed;
c) a statement that unless consumer within 30 days after receipt
of communication, disputes validity of
debt, or any portion of
debt, the debt will be assumed to be valid by the debt collector;
d) a statement that if the consumer notifies the collector in
writing within 30 days that debt or portion of
debt is disputed,
the collector will obtain verification of the debt; and
e) a statement that upon consumer's written request within 30 day
period the collector will provide the
name and address of the
original creditor if different from the current creditor.
PLEASE NOTE: If a consumer makes these requests, in writing, the collector can not continue with debt collection efforts until verification of the debt or the name of the original creditor is provided to the consumer.
However, that is not to say that a law suit can not be filed. There is a distinction to be made between collection efforts of a collector, and litigation.
II) The Florida Consumer Collection Practices Act - FCCPA - is a Florida law which provides similar but not necessarily identical requirements. For example, the Florida law applies to collectors and creditors. Also, it lists the following specific prohibited actions:
1) simulate being a law enforcement officer or a representative of a governmental
agency;
2) use or threaten to use force or violence;
3) tell a consumer who disputes a debt that the collector will disclose to
another information affecting the
debtor's reputation for credit worthiness without also informing the debtor the existence of the
dispute will also be
disclosed;
4) communicate or threaten to communicate with a consumer's employer before
obtaining a judgment unless
the debtor gives written permission to contact
the employer or acknowledges in writing existence of the
debt after the debt
has been placed for collection, but this shall not prohibit a person from telling
the debtor
that his employer will be contacted if a final judgment is obtained.
5) disclose to a person other than the debtor or family information affecting
the debtor's reputation, whether or
not for credit worthiness, with knowledge
or reason to know the other person does not have a legitimate
need for the
information or the information is false;
6) disclose information concerning the existence of a debt known to be reasonably
disputed by the debtor
without disclosing that fact;
7) willfully communicate with the debtor any member of his family with such
frequency as to be expected to
harass them, or willfully engaging in other
conduct which can reasonably be expected to abuse or harass
debtor or any member
of debtor's family;
8) Use profane, obscene, vulgar or willfully abusive language in communicating
with the debtor or any
member of his family;
9) claim, attempt, or threaten to enforce a debt while knowing the debt is
not legitimate or assert existence of
some other legal right when such person
knows the right does not exist;
10) falsely use communication simulating legal or judicial process or giving
appearance of being authorized,
issued or approved by a government, governmental
agency, or attorney at law, when it is not;
11) communicate with a debtor under the guise of an attorney by using stationery
of an attorney or forms or
instruments which only attorneys are authorized
to prepare;
12) orally communicate with a debtor as to give the false impression or appearance
that such person is or is
associated with an attorney;
13) advertise or threaten to advertise for sale any debt as a means to enforce
payment except under court
order or when acting as assignee for the benefit
of a creditor;
14) publish or post, threaten to publish or post, or cause to be published
or posted before the general public
names or list of names of debtors--commonly
known as a deadbeat list--to enforce or attempt to enforce
collection of consumer
debts;
15) refuse to provide adequate ID or name of employer or other entity when
requested to do so by a debtor
from whom he is collecting or attempting to
enforce collection of consumer debts;
16) Mail any communication to a debtor in an envelope or postcard with words
typed, written, or printed on the
outside of the envelope or postcard calculated
to embarrass the debtor. An example of this would be an
envelope addressed
to "Deadbeat, John Doe".
17) Communicate with the debtor between the hours of 9 p.m. and 8 a.m. in the
debtor's time zone without
prior consent of the debtor.
III) Florida's Homestead and Personal Property Exemptions: Many people are familiar with the term "homestead exemption" in the context of the first $50,000.00 of value of their home to be exempt, or free, of property tax. The term "exemption" means property that has special status, and in Florida, those exemptions, or protected assets, involve much more than real property taxes.
Property that is protected from creditors: Consumers who owe money are still entitled to the protections afforded by law, both as to the method of collection and property which can not be taken to satisfy a debt. The following assets are among many types of property protected under Florida law from being taken to satisfy an unsecured debt:
a) A person's home where he or she actually lives, no matter how much
equity there may be in the property,
and regardless of whether the person is single or has dependents; Florida statutes and case law construes
a residence to be a mobile home, or a houseboat, [but the property may be taken
if mortgage payments,
taxes, or mechanic liens are not paid;*
b) The wages, commissions, or salary of a head of a family [someone who provides more than 50% of the
support for a dependent]
c) $1,000.00 of personal property if the debtor owns a home or $5,000.00
if the person doesn't own a home or
claim the benefit of homestead ownership; personal property is anything that is not land or an improvement
to land, so that is cash, money in the bank, furniture, jewelry, clothing, investment accounts, cars, animals,
debts owed to the person, and so forth.
d) $1,000.00 equity in a single motor vehicle [van, motorcycle, motor home]
e) Cash surrender value of life insurance policies insuring the life
of the debtor;
f) Annuity benefits
g) IRA's, regardless of the amount *
h) 401k's, regardless of the amount*
i) Pensions
j) Medically prescribed health equipment
k) College Education funds
l) Health Savings Accounts
m) Veteran's Benefits
n) Disability Benefits
o) Social Security Benefits
p) Pre-Need Funeral Payments
q) Unemployment Benefits
r) Worker's Compensation Benefits
s) certain others under State and/or Federal law
* Exceptions exist when the property is obtained as a result of fraud or fraudulent conveyance.
Often, individuals do not have assets other than the items listed above. No one can be imprisoned for the failure to pay a bill. A creditor has the right to bring a law suit and obtain a Final Judgment, at which time the law permits a creditor to make inquiry into the debtor's assets, financial records, and the like, but a creditor can not establish a judgment lien upon an individuals homestead [Article X Section 4 of the Florida Constitution].
Special circumstances may exist, such as when the debtor is the head of a family but the creditor is someone seeking to collect past due alimony or child support, or someone who owes money for student loans or taxes.