Are you being hounded by debt collectors? Did you know that you have rights that can protect you from unscrupulous collection agencies?
A San Francisco federal judge recently approved a preliminary $3.2 million settlement in a class action lawsuit involving a private debt collector who posed as a district attorney in an attempt to collect $20 million from overburdened and scared consumers.
Corrective Solutions, the debt collector in this case, contracted with district attorneys to collect on bounced checks. Then the company targeted consumers with a history of bounced checks.
Corrective Solutions sent the consumers letters on phony district attorney letterhead, threatened them with jail time, and suggested that collection fees of up to $200 would be applied to each check that had bounced.
The debt collector lost his case when a preliminary settlement was reached earlier this month. A final hearing on the settlement is scheduled for January 2014.
This wasn't the first time Corrective Solutions had to deal with unhappy consumers and the justice system. Corrective Solutions was previously called National Corrective Group, Inc., which filed for Chapter 11 Bankruptcy four years ago to avoid four class action lawsuits in several states.
How Can You Protect Yourself from Agencies Like Creative Solutions?
The Fair Debt Collection Practices Act prohibit the following practices:
- Harassment: Collection agencies are not allowed to make threats, use obscene language or call you several times a day.
- False Statements: Collectors can't misrepresent themselves or claim to be attorneys or representatives of a government entity or credit bureau.
- Debt Amount: They can't collect amounts that are greater than your actual debt, unless your state law specifically allows that. Check with a bankruptcy attorney before agreeing to pay any collection fees
In addition, collection agencies must provide proof of your debt. This would include a document with your signature verifying that you did indeed apply for the debt, such as a home mortgage or a car loan.
Here are some additional points you need to know:
- You have the right to ask a debt collector to stop contacting you. All you have to do is send them a written request.
- Don't engage with debt collectors over the phone. Simply hang up.
- You have 35 days from your initial contact with a debt collector to ask them to document the amount you owe and request proof that the collection agency is authorized to contact you.
- Don't admit over the telephone that you owe the debt.
- If you receive a summons and complaint - legal terms for being sued - contact an attorney who handles bankruptcy cases
The Law Offices of James V. Sansone offers a full range of family law and bankruptcy legal services. We are located in Santa Rosa, California and serve clients throughout Sonoma County, Mendocino County, and Lake County, including Santa Rosa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport, and Kelseyville.