Debt Collection and Credit Reporting Issues Impacting Senio

Debt Collection and Credit Reporting Issues Impacting Seniors

JAMES A. FRANCISFrancis & Mailman, PCLand Title Building, 19th Floor100 South Broad StreetPhiladelphia, PA 19110Phone: 215-735-8600Fax: 215-940-8000E-mail: jfrancis@consumerlawfirm.comwww.consumerlawfirm.com

1

Why seniors may be subjected to unlawful debt collection and credit reporting practicesRampant Abuse in Collection Industry FTC receives more complaints about debt collectors than any other industry, 140,036 in 2010Bad Debt Buying Industry has explodedSeniors perceived as vulnerable and having access to income, even though may be fixed;Often credit inactive

2

Federal laws which prohibit unfairness, deception and harmful tactics by debt collectors and credit reporting industry Mandatory attorney’s fees provide for free/no cost representation by private lawyers; Can recover $1000 statutory damages under FDCPA, plus any actual damages, FCRA actual damagesFDCPA “strict liability”statute/FCRA very specific as well

Two Important Laws that Protect Seniors and Consumers Generally: Fair Debt Collection Practices Act and Fair Credit Reporting Act

3

FTC and its website; Consumer Financial Protection Bureau (CFPB)Senior Law CenterPrivate lawyers/consumer advocates who will usually work on a contingency;www.creditreportproblems.com

Resources Available To Seniors and Free Legal Help/Assistance

4

Repeated, harassing and abusive phone calls;Contacting family, neighbors and 3rd parties to embarrass consumer into paying debt;Lies/deceptions/misrepresentations—too many to listReporting debts on credit report that are prohibited

Common Unlawful Collection Practices

5

FDCPA prohibits harassing and abusive communications generallyNo calls before 8AM or after 9PM Right to demand verification/validation of a debtRight to impose “cease and desist” on communicationsThe Telephone Consumer Protection Act, its applicability, cell phones and the Do Not Call List

STOPPING REPEATED AND HARASSING PHONE CALLS AND LETTERS

6

Date Your Name Your Address Your city, state, zip codeName of Collection AgencyAddressCity, state, zip codeDear Sir/Madam:After being contacted on numerous occasions by employees of your agency, I am writing to demand that you cease and desist contacting myself or anyone else regarding this debt and in the future only contact me through US Mail. I also request that you send written verification that I owe this debt to your company. Sincerely, (sign here) Your name

7

SAMPLE CEASE AND DESIST LETTER

FDCPA prohibits debt collectors from speaking with 3rd parties about a debt except for “location information”FDCPA prohibits calls to the workplace/employer if debt collector knows consumer cannot take calls there

Stopping Contact with 3rd Parties

8

Consumer will be arrested or go to jailThreatening to sue or suing on old debtsSocial Security income is attachable“Sheriff is coming” to take house, cars or other propertySenior liable for debts of children/family membersClient Seena Rosenberry case and the CBS storyChildren/family liable for debts of senior Senior liable for medical billing/Medicare submission errorsDebt will be reported on credit report even though old

Common Lies and Misrepresentations

Punishable Under FDCPA

9

Reporting false or otherwise prohibited information on consumer’s credit reportBoth FDCPA and FCRA prohibit false credit reportingIncreasingly utilized tactic because of the “leverage” and pressure it creates and growing consumer awareness

Misreporting Debts/Account Information

10

Reporting negative information after 7 years/Debt ReagingReporting account without noting that it has been disputed by the consumer Reporting prohibited information about medical bills/procedures (including reimbursement submissions)

Frequently Violated Credit Reporting Prohibitions

11

Debt Collector buys delinquent or past due account that is older than 7 yearsAge of debt relates to “date of first delinquency”Debt Collector assigns the date of collection as the date of first delinquency, reaging debt another 7 years;

Debt Reaging: A Common Practice With Collection Accounts

12

FDCPA section 1692gFDCPA section 1692e(8)FCRA section 1681i and 1681 s-2(b)

Broad Dispute Rights Under FDCPA and FCRA

13

DC must advise consumer of right, and specifics of the debt (clearly outline the debt and creditor to whom owed)Within 30 days of first communication from a debt collector, and within writing Gives consumer right to demand that debt collector provide verification or “proof” of the debtDebt Collector must cease collecting during verification period

FDCPA 1692g Dispute: Validation/Verification

14

Prohibits debt collector from reporting the debt to anyone, including a credit reporting agency without noting its disputed statusDispute can be orally or in writingFailing to note the disputed status an automatic violation;

FDCPA Section 1692e(8)

15

Apply to credit reporting agencies and creditors, not just debt collectorsRequire both to conduct an investigation of the consumer’s dispute, and failing to do so allows consumer to sue for damagesDispute MUST be made to the CRAEven if the investigation results in verification of the debt/account, must still report disputed status

FCRA Sections 1681i/1681s-2(b)

16

DateYour nameYour addressYour city, state, zip codeName of CRA and/or furnisher [Equifax, Experian, Trans Union]AddressCity, state, zip codeDear Sir/Madam:After reviewing my credit report, I am writing to dispute the following inaccurate information. I am listing each item along with the way it should be corrected:[Account name] [Account number] [How it should report/Why it’s inaccurate*]Supporting documents have been enclosed. Pursuant to the FCRA, please forward them to the credit furnishers. If you are not going to forward them, please inform me so I may do so myself.Sincerely,(sign here)Your nameYour Social Security NumberYour Date of BirthEnclosures: (list what you are enclosing – examples: police report, fraud affidavit, proof of payment, etc)

17

SAMPLE DISPUTE LETTER

Use of someone’s name and personal identifying information to buy goods, obtain money and use creditSeniors sometimes targeted because often not credit active

The Role of Identity Theft. What is it?

18

Secret Credit Card SwipingATM FraudMail left at old addresses

The Most Common Forms and Causes Today

19

Order Credit Report RegularlyFACTA/FCRA now permits free report once a year from each of the CRASLook at credit history AND inquiries for creditors you don’t recognize

How to Guard Against It

20

Fraud AlertsInvoking FDCPA right to demand verification/validationFair Credit Billing Act for ChargesRight to Disputes to Big 3 CRA’s and debt collectors

What to do if it Happens

21