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What are Banned Debt Collection Agencies and Why Might They be Banned?

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Under the Fair Debt Collection Practices Act (FDCPA), collect agencies that break federal laws a banned or prohibited from conducting any business activities in the debt collection field.

The FDCPA is a collection of federal statutes that are intended to protect the rights of consumers. This set of laws has stringent regulations in place to ensure debt collection agents and firms do not utilize unethical and illegal methods in their collection efforts.

How is a Debt Collector Banned?

FDCPA enforcement is the responsibility of the Federal Trade Commission (FTC). Debt collectors accused of violating the FDCPA are prosecuted in a federal court. These lawsuits may be brought by:

  • the FTC,
  • individual consumers,
  • class action groups, which made up of individual consumers with a common legal complaint.

Collection agents and firms that are found to be in violation of FDCPA regulations may face a range of punitive actions. These include fines, monitoring, increased reporting requirements, and in severe cases, banning.

What Happens When an Agency is Banned?

Collection agencies that are banned by the FTC are published on the agency’s website, along with links to court documents related to the ban. These agencies or individual debt collectors often owe fines, may serve jail time, and suffer other legal consequences.

A ban on a collection firm red flags any future activities conducted under the same or a similar business name. The FTC closely watches consumer complaint boards and other sources to ensure any future violations are shut down immediately. The banned list on the FTC’s website provides consumers and legal counsel the ability to quickly identify illegal actions and to notify the FTC immediately.

What Gets Collection Agencies Banned?

Gross and willful violations of FDCPA regulations result in the FTC forcing collection agencies to cease operations. These violations may include harassment, threatening or lying to consumers, and knowingly overcharging, among other illegal activities.

What to do if You’re being Harassed by a Debt Collector

If you believe your rights under the FDCPA have been violated, you should act immediately. Begin collecting evidence against the collection agency, including any written notices or other documents you’ve received. Contact an attorney familiar with FDCPA cases. Not only may a lawyer be able to stop the harassment, but you may be entitled to compensation of up to $1,000 for each violation the debt collector has committed against you.