Appeals Court Rules Aggressive Debt Collector Violates Consumer Rights

Public Citizen Wins California Consumer Case on Appeal

In a win for consumers, a federal appeals court ruled that a private California debt collector can be sued for its overly aggressive tactics, even though the company is working on the behalf of local prosecutors.

Public Citizen has won a case before a San Francisco appellate court, which ruled that just because a private company contracted with local prosecutors, it was not an arm of government and did not have the protection of sovereign immunity. In making its ruling, the court gave consumers the right to sue the company over its aggressive collection tactics.

The company, American Corrective Counseling Services Inc. (ACCS), is a so-called "check diversion" company, meaning that it uses its contract with local prosecutors to send out letters on official stationary threatening consumers who have written bad checks with criminal prosecution or jail unless they pay collection fees.

The company then gives the prosecutors a share of its revenues. In the suit, Del Campo v. ACCS, California consumers represented by Public Citizen claim that ACCS's threats of prosecution violated their rights under state and federal consumer protection laws.

Find out more about the win.

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Are collection companies harassing you about a bill you supposedly owe?

See prior blog: How to Deal with Abusive Debt Collectors: Do you know your rights?

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Rogue debt collectors -- how to fight them

A recent CNN report by Jen Haley, outlines some basic rights you have under the Fair Debt Collection Practices Act:

A debt collector cannot call you before 8 a.m. or after 9 p.m., unless you agree.

You cannot be contacted at work if the collector knows your employer disapproves.

If you don't want to hear from a debt collector, write a letter telling them to stop. By law, they have to. Remember, the debt won't go away and you can still be sued.

The debt collector can contact your attorney -- if you have one. If not, your friends and family can be asked about how to get in touch with you.

A debt collector can't misrepresent the amount of your debt.

A debt collector also cannot use profane or threatening language

Debt collectors can't say that they will put a lien on your property or file a lawsuit unless the agency really means to do that and it's legal.

Collectors can't legally claim federal benefits, such as Social Security or your retirement accounts, like your IRA or 401(k).

Once you're contacted by phone, you have the right to get a notice that outlines your debt, whom you owe money to, and what action to take if you don't owe the money. Keep in mind that a debt collector can collect a debt owed by an ex-spouse. If the debt was incurred while you married, you may be liable for the debt after a divorce even if the divorce papers state your spouse is responsible for paying off the debt.

If you've been contacted by a debt collector, but you don't think you owe a debt, you must write a return letter stating that the debt is not yours within 30 days. Once a collector receives your letter, they should send you proof of the debt, such as a copy of the bill. Don't be coerced into paying a debt you don't owe. If you do pay just to get rid of the debt collectors, it's an admission of guilt, and it will have a negative impact on your credit score.

Keep in mind that some debt has an expiration date. There is a limit to how long collectors can legally collect your debt. MORE