In what is being lauded as a victory for everyone facing Woodland Hills bankruptcy‚ a large consumer debt buyer has been ordered to pay a $2.5 million fine for a number of misrepresentations while trying to go after old debt.
Asset Acceptance is a company that purchases overdue debt from creditors such as banks‚ credit card companies‚ fitness clubs and more. Asset Acceptance then hounds those who owe.
Unfortunately‚ our Woodland Hills bankruptcy attorneys know that although Asset Acceptance is one of the largest of its kind‚ it’s not the only company in which agents will misrepresent themselves and their powers in order to bully people into paying up.
In this case‚ the Federal Trade Commission has alleged that the company told people they would sue them (even when the debt was legally too old to go after in court). They also reportedly failed to investigate claims that the original debt was erroneous – they simply kept on pressing people to pay. In doing so‚ the FTC says the agency broke the law – the Fair Collection Practices Act an the Fair Credit Reporting Act. In all‚ there were nine counts against the company‚ including:
- Insisting that consumers owed money‚ when that could not be proven;
- Didn’t disclose that certain debts were too old to be legally enforceable (called time-barred debt) or that if a consumer made a partial payment on that debt‚ it would actually hurt the consumer by extending the amount of time the debt could be enforceable;
- Giving false information to credit reporting agencies;
- Not performing an investigation when receiving notice of a dispute from a credit reporting agency;
- Hounding third parties (employers‚ family members) regarding the debt;
- Informing third parties about debts;
- Using illegal means to obtain debt‚ such as fudging on the legal status‚ nature or amount of the debt;
- Not providing proof of the debt and continuing to try to collect it even when the consumer had disputed it.
Under the settlement agreement‚ Asset Acceptance has to let consumers know if a debt is too old to legally sue them. Once the company makes that disclosure‚ it is forbidding from going after them in court‚ even if the person makes a partial payment.
It is also forbidden to make any misrepresentations whatsoever about who they are‚ the legal power they hold or anything else. It must thoroughly investigate when a consumer insists the information about the debt is wrong. They can’t put a debt on a consumer’s credit report when it hasn’t put that same notice in writing to the consumer. The settlement also underscores the details of the Fair Credit Reporting act and Fair Debt Collection practices – and warns the company from crossing the line again.
The FTC has also issued information to consumers about time-barred debt‚ and has recommended that consumers talk with an experienced attorney before making any sort of payment on an old debt.
Cal West Law will provide a free consultation to help guide you in making a decision that works for you. In Encino‚ Glendale‚ and Woodland Hills‚ just call (800) 568-0707.