The Fair Debt Collection Practices Act established strict rules that collection companies in Michigan and around the country must follow. The FDCPA was passed in 1977 to put an end to harassment, threats and intimidation, but some debt collectors routinely flout the 1977 law. However, the FDCPA only applies to companies that are acting on behalf of others or pursuing debts that they have purchased. It does not apply to in-house debt collectors. This means that a bank or credit card company seeking payment of one of their own debts is not bound by the FDCPA’s provisions.

This is rarely an issue as most lenders prefer to write off and sell unpaid debts rather than become involved in the sometimes unsavory collection business. When they do pursue their own debts, they generally follow the rules. These rules prohibit debt collectors from pretending to be law enforcement or government officials, calling consumers at unreasonable times, continuing to contact consumers after being asked to stop, engaging in misrepresentation or deceit and trying to embarrass or shame consumers into making payments.

Threatening arrest is one of the most common FDCPA violations. While defaulting on a loan or credit card balance can lead to a civil lawsuit, failing to repay a debt rarely becomes a criminal matter. When debt collectors ignore the provisions of the FDCPA, consumers can report the illegal conduct to the Consumer Financial Protection Bureau. They can also file lawsuits against debt collection companies that flout the rules.

Debt collectors can be extremely bothersome even when they act in accordance with the law, but individuals with unmanageable financial situations can take action to put an end to this daily nuisance. Attorneys with debt relief experience could explain how an automatic stay is issued when a Chapter 7 or Chapter 13 bankruptcy is filed. This is a court order that requires creditors to cease all of their collection efforts. It also stops wage garnishments and debt-related litigation.