The debt collection agency is chalk full of highly competitive companies that are motivated by lucrative profits for the successful collection of outstanding credit card and personal loan accounts.
As a result of the pot of money at the end of the debt collection rainbow, some debt collection agencies cross the legal line by making false statements regarding consumer debts. Fortunately, a landmark 1977 federal consumer protection law prohibits third party debt collectors from issuing false statements of any kind.
Passed by the United States Congress, the Fair Debt Collection Practices Act (FDCPA) outlaws a long list of debt collection tactics that were considered legal for decades. For example, a bill collector such as Penn Credit is not allowed to harass you by calling your home or work phone number throughout the day.
The debt collection agency is also barred from using deceptive debt collection practices, which include making false statements regarding your debt.
Types of False Statements Third Party Debt Collectors Make
You should know that a bill collector like Penn Credit is not only forbidden from making false statements to you, but the company is also legally liable for making false statements to someone you know.
One of the most effective illegal debt collection tactics implemented by some companies involves contacting a third party and lying about the third party’s legal obligation to settle your consumer debt. Unless another person co-signs a personal loan or a credit card application, no one else is legally liable to take care of a financial obligation that is your responsibility.
As far as direct false statements, a debt collection agency might impersonate another organization to put more pressure on you to pay off a delinquent credit card or personal loan balance. Impersonating the IRS or a law enforcement agency is a highly effective motivator for consumers to take action on personal debts.
However, the IRSD has no interest in your personal finances, except for the column on your financial ledger that pertains to federal income taxes. The United States does not have any laws on the books that criminalizes consumers that have fallen behind on their bills.
What to Do If Penn Credit Makes False Statements
In 2018, the United States Court of Appeals for the Eighth Circuit court ruled that a consumer must show any alleged false misrepresentations were “material” for the misrepresentations to be considered false.
This means that not only do you have to prove a third party debt collector made false statements, you also have to demonstrate the false statements had a direct negative impact on your ability to evaluate your financial options.
The addition of the “material” clause to the misrepresentation provision of the FDCPA makes it important for consumers to work with a licensed FDCPA lawyer.
Possible Damages under the FDCPA
According to a powerful provision of the FDCPA, consumers have the right to sue bill collectors to collect monetary damages. Under the FDCPA, a consumer can file a claim seeking statutory damages for every violation of the FDCPA committed by the same company. For the pain and suffering caused by physical and/or emotional distress symptoms, consumers can file a lawsuit that seeks actual damages.
Schedule a free initial consultation with an experienced FDCPA attorney to learn more about the sweeping consumer protection law.
*Disclaimer: The content of this article serves only to provide information and should not be construed as legal advice. If you file a claim against Penn Credit, or any other third-party collection agency, you may not be entitled to compensation.