Debt collectors use a variety of tactics and terminology, and I have found over the years that many debt collectors use the same words and phrases.  Some like to say “good luck” at the end of a harassing call or voicemail message.  Many like to say that they are “legal representation” for a creditor.  Others will tell a consumer that the collector will “mark it down as a refusal to pay” if the consumer does not make a payment over the phone.  There is a provision in the Texas Debt Collection Act regarding this “refusal” language.

The Texas Debt Collection Act prohibits a debt collector from representing or threatening to represent to anyone other than a consumer that the consumer is willfully refusing to pay a non-disputed consumer debt when it is in dispute and the consumer has given the debt collector written notice of the dispute.  Debt collectors will often violate this provision in order to harass the consumer through disclosure of private, yet false, facts to a consumer’s friends, co-workers, family, and neighbors.

The Texas Debt Collection Act prohibits a person, while attempting to collect a consumer debt, from accusing falsely or threatening to accuse falsely a person of fraud or any other crime.  We see this violation frequently, and it usually occurs in one of the following ways:

• Threatening to arrest someone for failing to pay a debt
• Accusing a consumer of defrauding a creditor simply because the consumer was unable to pay a debt
• Telling a debtor that she is going to be prosecuted if she does not pay a credit card bill
• Alleging that a person will be charged with “wire fraud” because the person secured a payday loan online but was unable to pay all amounts when due

If you owe a debt and have experienced any of the above, the conduct more than likely violates the Texas Debt Collection Act.  The Act makes a violating person liable for actual damages, attorneys’ fees, and costs.  A court can also grant an injunction against the debt collector.

The Texas Debt Collection Act prohibits a debt collector from using or threatening violence or other criminal means to collect a debt.  This is an obvious prohibition:  a person cannot commit, or threaten to commit, criminal acts in order to obtain money from another person.  Aside from being obvious, it might appear that the Act prohibits conduct that might never occur.  Surely debt collectors don’t commit crimes just to collect debts.  We have actually seen the following in cases we have handled:

• Threat to “shank” someone
• Threat to cut someone
• Assault
• Threat of assault
• Unlawfully obtaining telephone call records

If you have been threatened with bodily injury by a debt collector, contact the police immediately.  You might need to be persistent.  Some police departments will tell you that you are calling about a civil matter, and that there is nothing that the police can do.  However, when someone threatens to harm you, the threat might be a commission of a crime.

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The Texas Debt Collection Act requires certain types of debt collectors to secure and file with the Texas Secretary of State a judgment bond.  The bond must be in favor of a person damaged by a violation of the Texas Debt Collection Act and in favor of the State of Texas.  The bond amount is $10,000.00.  Only third-party debt collectors (as defined by the Act) and credit bureaus must obtain such a bond.  If a collection agency does not obtain and file an appropriate bond, it is in violation of the Act.  Here is a link to a site at which you can search for a particular collection agency to determine whether it has filed a bond -

 http://direct.sos.state.tx.us/debtcollectors/DCSearch.asp

The Federal Fair Debt Collection Practices Act (“FDCPA”) generally does not apply to the actions of original creditors.  However, Texas residents are protected not only by the FDCPA, but also by the Texas Debt Collection Act.  Almost all provisions in the Texas Debt Collection Act (“TDCA”) apply not only to original creditors, but anyone collecting a consumer debt.  A “debt collector” under the TDCA is “a person who directly or indirectly engages in debt collection and includes a person who sells or offers to sell forms represented to be a collection system, device, or scheme intended to be used to collect consumer debts.”  As you can see, the definition is quite broad.  Even so, our firm has not seen many cases in which a collection agency or creditor has engaged in abusive and harassing tactics based on forms provided by a third party.  Usually, abuse is in the form of numerous calls to a consumer’s friends, neighbors, and co-workers by the creditor or debt collector.

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The Texas Debt Collection Act provides protection for people harassed and/or abused by creditors and debt collectors in connection with attempts to collect debts.  However, it does not protect people for all types of debts.

If a collector’s conduct is to fall within the Act, the collector must be attempting to collect a consumer debt.  The Act defines a “consumer debt” as “an obligation, or an alleged obligation, primarily for personal, family, or household purposes.”  This is the type of debt that most consumers incur – credit card purchases for personal items, car loans, home loans, etc.  A debt incurred to run a business would not usually be a “consumer debt” under the Act.  Therefore, a person could not usually assert a claim under the Texas Debt Collection Act for harassment in connection with attempts to collect a business debt.

I have heard a number of collection abuse stories and profane voicemail messages while representing consumers over the years.  Harrassment by collectors runs the gamut – from threats of arrest, to threats of bodily injury, to the use of profanity and racial epithets.  I have heard recordings so profane that I would not post them in this public forum.  No one should be forced to endure such treatment simply because a debt was not paid.  Moreover, these tactics violate the Federal Fair Debt Collection Practices Act and Texas Debt Collection Act.  If you are experiencing such abusive behavior by debt collectors, contact your state’s attorney general and/or a consumer protection attorney.

A Dallas County Court at Law jury recently awarded over 8 million dollars to a woman sued by Midland Funding LLC (“Midland Funding”).  Midland Funding sued a consumer to collect an alleged debt, and the consumer filed counterclaims against Midland Funding.  The consumer countersued Midland Funding for Texas Debt Collection Act and Texas Deceptive Trade Practices-Consumer Protection Act (“DTPA”) claims.  The consumer also sought exemplary damages and “additional” damages under the DTPA.  Our firm was not involved with the case, but it is our understanding that Midland Funding’s attorney did not appear for trial.

The jury determined, among other things, that Midland Funding:

• Attempted to collect a disputed consumer debt from the consumer by causing her telephone to ring repeatedly and continuously;
• Attempted to collect a disputed consumer debt from the consumer by making repeated and continuous telephone calls with the intent of harassing the consumer;
• Used false representations to collect a disputed consumer debt from the consumer;
• Used deceptive means to collect a disputed consumer debt from the consumer;    and
• That Midland Funding would continue with the conduct described in the four bullet points above unless prohibited by court order.

The jury provided, among other damages, $100,000 for mental anguish and $8 million in exemplary damages.  A copy of the jury’s completed charge, with the last page removed to avoid disclosure of a juror’s name, is here -

midland-funding-llc-jury-charge

We recently filed suit against a collection agency for allegedly calling our client 15-30 times each day.  We represented clients against the same agency in the past for the same type of tactics.  Apparently, the prior lawsuits failed to cause the collection agency to change the way it does business.

How many collection calls in one day are too many?  Generally, Texas law prohibits a collection agency from calling numerous times with the intent to harass the person at the number being called.  There is no specific number of calls mentioned in the statute.  Therefore, each case must be viewed individually, looking at all the facts and circumstances.  Under just about anyone’s measure, 15-30 calls per day would likely meet the standard.

We have seen a number of cases over the years in which a consumer is harassed by a debt collector that will not identify itself.  Some debt collectors pretend to be government officials.  Other debt collectors will identify the company name but will refuse to provide an address and/or or telephone number.  If you want to dispute or obtain information about a debt in writing and/or send a written request to cease and desist collection efforts, you obviously cannot do so without contact information for the collection agency.  There are a few ways to obtain it.

The most obvious way to obtain the information is to Google the name of the collection agency and/or the telephone number (if available).  There are a number of websites devoted to debt issues and/or telephone numbers from which harassing calls are made.  Many websites do not appear to provide completely reliable information.  Therefore, you should attempt to verify information obtained at suspect websites with information obtained elsewhere.

You can also go the website of the ACA – the American Association of Credit and Collection Professionals.  Many collection agencies are members of the organization.  The membership directory is here -

http://www.acainternational.org/memberdirectory.aspx

If the collection agency collects debts in Texas, it is usually required by the Texas Debt Collection Act (Chapter 392 of the Texas Finance Code) to obtain and have on file with the Texas Secretary of State an appropriate bond.  The Secretary of State maintains a list of all collection agencies, creditors, debt buyers, and collection attorneys who have filed such a bond.  The search page is here -

https://direct.sos.state.tx.us/debtcollectors/DCSearch.asp 

Finally, you can search the collection agency’s name or phone number at the Better Business Bureau’s website.  The search page is here -

http://www.bbb.org/us/Find-Business-Reviews/