Updated on
Author: Sergei Lemberg
Can A Debt Collector Threaten Me With Reporting False Credit Information?
![Debt Collector False Credit]()
General Rule: No, this is a violation of the Fair Debt Collection Practices Act (FDCPA).
Debt collectors have one job: collect on a past due account. A collection agency may try several different tactics to get someone to pay a debt. Even a single call from a collection agency can be annoying. However, a mere call from a collections agency is not necessarily illegal.
However, there are several things that a collection agency cannot do. Under the FDCPA, several tactics that involve harassment and deception are illegal. However, this doesn’t stop many collection agencies.
The FDCPA strictly prohibits various kinds of threats. This includes a threat to report false credit information. This illegal activity can impact your reputation or creditworthiness. If you are receiving these types of threats, you are not helpless. This article will help you identify this type of illegal activity and the action you can take to stop it.
Threats of False Credit Reporting
Some collection agencies use deception and fear to get you to make a payment. The thinking is, that your fear of having your credit score ruined will prompt you to pay off the debt with the collection agency.
The inverse is also true. If you dispute a debt, a collection agency must report this dispute to the credit bureau. However, sometimes they neglect to do this which is also illegal.
Threats of reporting false credit information may be tricky to identify. Pay careful attention to what a collection agency is threatening to report. If it’s false, even the threat of doing so is illegal.
It’s also important to note that if you have a past due debt your credit score has already been impacted. Additional reports to the credit bureau are not likely to have a dramatic impact on your current credit score. As a result, do not let the threat of false credit information coerce you to make a payment. This is especially true if you have more pressing debts to address.
The FDCPA’s Prohibition Against Harassment
Collection agencies resort to these types of threats and other harassing behavior to coerce you into paying a debt. Fortunately, the FDCPA protects you from various forms of harassment and deception. This includes threats of illegal action. As it pertains to reporting information to credit bureaus, the FDCPA prohibits any false or misleading representations.
This not only includes the threat to report false credit information. They also cannot threaten the following:
- Criminal prosecution
- A lawsuit if they do not actually intend to follow through
- Violence or Force
There are several other types of harassing activity that are illegal under the FDCPA. This includes repeated phone calls, calling at unusual times and using profane language.
How Can I Stop These Threats?
If a collection agency is threatening to release false credit information, you will want to take action immediately. False credit information can have a long-lasting negative impact.
Here are some options to stop these threats and a collection agency actually reporting false information:
- Send a Written Demand to the Collection Agency. It is more effective if you put your demand in writing to get them to stop making false threats. When you do so, send it via certified mail. You can use this as evidence if you have to take further action.
- Report Them to a Government Agency. You can submit a consumer complaint about the collection agency to the Consumer Financial Protection Bureau (CFPB). In addition, make sure you also file a complaint with the Federal Trade Commission (FTC). They handle the enforcement of the FDCPA.
- Take the Collection Agency to Court. Another option is to sue them under the FDCPA. If successful, a court may award statutory damages up to $1,000. You may also receive damages for actual loss, court costs and attorney fees.
Tip: If you choose to file a lawsuit, it is recommended that you at least seek a consultation with an attorney.
- Discuss Settlement Terms. At first glance, this may seem like an odd option. However, if you have proof of a violation a collection agency may consider negotiating a discounted settlement. Of course, the basis for doing so would be to avoid legal consequences.
Tip: As soon as you suspect a collection agency violation, gather any evidence that can prove this. In addition, take notes about all interactions with the collection agency.
Conclusion
A collection agency has a job to do. However, they must conduct themselves with professionalism and honesty. If a collection agency is threatening to ruin your reputation with false credit information, take action immediately.
Disseminating false credit information can result in long-term damages. Due to the seriousness of this illegal behavior, consider contacting an attorney who specializes in defending people from collection agencies. They can put an end to the illegal debt collection activity swiftly.
Additional Resources
About the author:
Sergei Lemberg is a consumer rights attorney, practicing since 2006, whose practice focuses on consumer law, class actions and personal injury litigation. He is known for a United States Supreme Court case (Facebook v. Duguid) defending consumers from autodialers under the Telephone Consumer Protection Act of 1991 to send unsolicited text messages. He is also the author of Defanging Debt Collectors, a book that teaches consumers how to battle debt collectors and win.
See more posts from Sergei Lemberg