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How You Can Help Protect Your Rights

Why You Should Hold Creditors Accountable

There are many powerful consumer protection laws that protect you from unfair lending practices, unfair debt collection practices, unfair credit reporting practices, and other abuses. However, most of those protections are worthless unless you use them to your advantage. Your state’s Attorney General and the U.S. Attorney General cannot prosecute every abusive creditor. They simply do not have the resources. This is why most consumer protection statutes give you the right to sue when creditors violate the law. However, you cannot be an effective private attorney general if you do not have the evidence to make your case. Creditor harassment is best documented by the person being harassed. While an experienced and effective attorney can build a strong case, it is up to you to provide the materials. Without those materials, your case is generally little more than a game of he-said, she-said.

A well-planned consumer defense strategy will have you working closely with your attorneys and their staff. For instance, if you are planning to file for protection under the U.S. Bankruptcy Code, you may want to plan ahead. A creditor who inadvertently violates the automatic stay is treated differently under the law than a creditor who knowingly and willfully violates the automatic stay. Similarly, playing a recording of a phone call from a creditor is more powerful than simply describing the phone call to a judge or a jury. Learning to document creditor harassment is essential to the success of a well-planned consumer defense strategy. This section describes some best practices for building your case.

Always Provide Written Notices

Never rely on a phone call or an email to provide notice to your creditors. This is true at every stage in any consumer defense strategy. When you retain an attorney, that attorney should notify your creditors in writing that they are to no longer contact you. This no-contact letter is invaluable for building claims against your creditors. Once a creditor is notified that a consumer is represented by an attorney, the creditor should cease direct contact with the consumer. If a creditor continues to contact the consumer, the creditor is in violation of the Fair Debt Collection Practices Act. Consumers considering filing a Chapter 13 bankruptcy may want to provide this notice to creditors prior to filing the case. This way, any contacts from creditors can be brought as an adversary proceeding within the bankruptcy case.

The importance of written notices is especially relevant in a bankruptcy context. Relying on the clerk of courts to provide notice to each creditor is not enough. If a bankruptcy is being filed to prevent a home from going to a sheriff’s sale, it is vital that the creditor and its attorneys be notified in writing. This notification should be provided via fax or certified mail. Without the additional layer of notice, it may be more difficult to pursue a stay violation claim if the creditor holds the sale. Written notice to each creditor also verifies that the creditor is aware of the bankruptcy filing. This notice can make or break a claim for punitive damages.

Documenting Violations Is Important

When creditor harassment goes undocumented, it is very difficult to bring successful claims against creditors who are violating the law. It is one thing to claim that a specific creditor called you 1,000 times in one month. It is another to document the time and date of each call and to record some of the phone calls. Similarly, simply throwing away collection letters prevents them from being used as evidence in an adversary proceeding or a federal lawsuit brought pursuant to the Fair Debt Collection Practices Act. Although creditor calls and letters are stressful and annoying, properly documenting a creditor’s behavior can help build a strong case.

Learn To Record Phone Calls

As long as you give notice to the person on the other end of the line, you can legally record a phone call. Recording phone calls is one of the most powerful tools available for fighting back against creditor harassment. Here is how to record a call:

1. Start your tape recorder.
2. Put the call on speaker phone.
3. Say the following: “I am recording this phone call. If you continue talking, that means that you consent to being recorded.”
4. Record the entire call.
5. State the date and time of the call and who you spoke to before you stop recording.
6. Stop recording.

If the creditor’s agent doesn’t stop talking, then the agent has consented to being recorded. By recording the call, it is possible to document violations of federal and state law that would otherwise resolve in a “he said-she said” battle in court. For instance, if a debt collector calls you an offensive name or swears at you, then that is a violation of the Fair Debt Collection Practices Act. That violation can be pursued in addition to other potential violations. Although it is possible to win based on the strength of your testimony alone, having a recording is always the best means of proving your claims.

Mark Jones, Rosemont, Illinois: Recording A Phone Call

As part of his consumer defense strategy, Mark has been advised to record phone calls from his creditors. Mark is preparing to file a Chapter 13 bankruptcy, and his attorney has already notified his creditors that they are to cease calling Mark. One of Mark’s creditors has continued to call Mark at least three times a day. Mark always records the date and time of the calls on his phone call log. When Mark has time to answer the calls, he waits to get a live person on the phone, turns on his microcassette recorder, and says, “I am recording this phone call. If you continue to speak to me, you consent to being recorded.” Sometimes the caller hangs up. Other times the caller continues to speak to Mark. On one such occasion, the caller replied, “Do whatever the f**k you want, deadbeat. We’re going to have the sheriff come out to your house and arrest you if you don’t pay this debt today.” Mark informs the debt collector that he is only to contact Mark’s attorney. Mark then politely ends the phone call. Mark notes the date and time of the call, as well as the collector’s name before he stops recording. He writes the details of the call on his phone log and stores the tape in a safe place. Based on these facts, Mark has 4 valid claims against the debt collection company for violations of the Fair Debt Collection Practices Act. He also has a claim based on the Illinois Consumer Fraud and Deceptive Business Practices Act.

It is very important to keep a written log of every call. If you have recorded a call, it is always best to write the date of the call on the tape and document that call on your log. It will help you keep your tapes organized, and will make it easier to find a specific tape when you need it.

Keep your tapes in a safe place. Do not record over your tapes. This is important because the tapes may become evidence at a future trial. In order for them to be admitted as evidence, you must be able to account for their location at all times from the time you make the tape to the time it is presented to the court. Careful documentation and storage is one of the most important practices. Each time you document a potential violation, you are adding to your potential future cash recovery.

Learn to Ask the Right Questions

When a creditor calls, record that call. In addition to recording the call, ask questions. If the person on the phone provides what turns out to be false or misleading information, then that is yet another valuable violation of the Fair Debt Collection Practices Act. If the creditors are going to take your time, then you should make the best possible use of that time.

Ask questions like:

1. What is your name?
2. What is your operator identification number?
3. Who do you represent?
4. What alleged debt is this regarding?
5. When did you purchase this debt?
6. Who did you purchase it from?
7. Based on your records, what is the balance due?

The key is to always ask questions using the W’s – who, what, when, where, why. You want to make the person answer in as much detail as possible. If the person cannot answer, ask to speak to someone who can answer your questions. Always keep the creditor’s agents talking. The more they say, the more potential claims you may discover.

If you ask no other questions, always be sure to find out to whom you are speaking. Get a name and an operator ID number. These are crucial pieces of evidence that help build a foundation for introducing that phone call at trial.

Learn To Properly Open and Store Letters

If you don’t have a letter opener, get one. When creditors send you letters, it is important to save each and every letter, including the envelope. The most important thing about the envelope is the postmark. That postmark is valuable evidence. This is why using a letter opener is so important. You want postmarks to be 100% legible and undamaged.

If you don’t have a file box, get one. The money spent on a file storage box and folders is an investment in your financial future. Make a folder for each creditor. As you receive correspondence, store the letters in the appropriate folder. Properly stored letters can help establish claims for stay violations, discharge violations, and other violations of state and federal law. Without the letters and postmarked envelopes, these kinds of claims are much more difficult to prove.

Learn To Read Your Credit Report and Store Copies of Previous Reports

When a bankruptcy discharge is issued, creditors are obligated to report discharged debts as having a zero balance. They are allowed to report them as discharged in bankruptcy, but can no longer report them as anything else. Reporting the debt as “charged off,” “settled,” or anything else violates the Fair Credit Reporting Act as well as the Fair Debt Collection Practices Act. The best way to prove these violations is to engage in the dispute process with the three major credit reporting bureaus. When disputing an improperly reported debt, it is essential that you provide the credit reporting bureau with documentation to support your dispute. If a debt is being reported as “past due” when it has been discharged in a bankruptcy, a proper dispute letter would include a copy of the bankruptcy discharge.

You will need to obtain and store copies of your credit report. You will also need to learn to identify old debts masquerading as new debts. This will often happen because your creditors sold your discharged debt to a third party. If a debt suddenly pops up on your credit report, and you don’t recognize the name of the creditor, pay close attention to the balance due. Does it match a debt you discharged in bankruptcy? If it does, you are likely looking at an entry created by a debt-buyer. Armed with that knowledge, it is possible to pursue violations and have the discharged debt removed from your credit report.

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