When it comes to money, you can never be too careful. There are many people who wish to scam you out of your hard earned money. Not only that, some professionals will prey on the ignorant hoping to abuse them and get bogus service fees from them.
Apparently, the most common target of these malicious people are the desperate consumers. And when it comes to desperation, there is none more frantic than people in debt.
We all need to be vigilant when it comes to our finances. As consumers, we are protected by certain debt relief laws. If you are going through a financial crisis, you may want to take time to learn about them to know your rights and thus protect yourself from being abused.
In this article, we will be discussing two debt relief laws that will prove to be important in your road towards debt freedom.
Important rules for creditors and debt collectors
The first of the debt relief laws is known as the Fair Debt Collection Practices Act. Also known as the FDCPA, this is the law that protects consumers from the abusive practices of creditors and debt collectors. While we understand that we are responsible for our own debts, that does not mean we should be subjected to threats, harassment and other abusive methods – even if it is done to force us to pay. That is whole purpose of the FDCPA – to showcase our legal rights against debt collectors.
Here are the important information stated on this debt relief law.
You should be well informed of the collector’s identity, company being represented, contact details and the debt amount being collected. This must be followed by a written document that states all the information about the debt collector and the debt.
You have every right to ask the debt collector to verify the debt that they are asking you to pay. Unless they can provide this, you don’t have to pay for the debt.
You are not to be called during ungodly hours – late in the evening or too early in the morning.
You can tell them how you want to be contacted and they should comply. This can be instructions to call you only at home and at certain times or only communicating through written correspondence.
They are prohibited from calling your neighbors, friends and employer about your debt. The only time they can do so is to get your contact details in case they have difficulty getting in touch with you. Apart from you, they can only call your spouse or your lawyer.
You can tell them to stop communicating with you if you wish. The law states that they should comply and can only get in touch with you to tell you that they will honor your request and will pursue legal action – in case they intend to do so.
They are not allowed to make threats and bluffs just to scare you.
They cannot use profane language to scare you into paying.
You can request the collector to send you the documented agreement that you have finalized over the phone.
You can use the FTC (Federal Trade Commission) website to file a complaint against debt collectors.
You can request for a list of the fees and other rates that you will pay on your debt. The collector is not allowed to make you pay more than what you owe the original creditor.
You can read more about the FDCPA through the FTC.gov website.
It is important that you try not to ignore the collector. They have every right to collect from you and you should give them the courtesy of talking to them at least once – even if it is to say that they should stop calling you.
What the law says about debt relief companies
The second of the debt relief laws that you must learn is about the Telemarketing Sales Rule or the TSR. This industry started to gain prominence in later years because the recession left several consumers under a lot of debt. If you have to hire a debt relief company to help with debt relief, you may want to know how you can spot the scammer companies from the not.
Here are three important issues that the TSR covers to help you find trustworthy debt relief companies.
Upfront payment. The first is all about asking for upfront payments. Debt relief companies are strictly prohibited from asking you to pay anything unless they have proof that they did something to improve your debt situation. This can be the first payment that they remitted to the creditor or the proof of a negotiated payment plan that the consumer can accept. Unless they have done that, they cannot ask you to pay anything. So if the company you are talking to is asking upfront payments, you may as well stop talking to them. No legitimate company will disobey this rule.
Complete disclosure of fees. Another important part of this law is the full disclosure of the fees that they have to pay. After the contract is signed, the company should not ask any payment that is not part of the original agreement. If the company will hold the money of the consumer to send to the payment they need to place it in FDIC insured accounts. Not only that, the consumer must have full control over the account.
Service description. Lastly, the debt relief company is not allowed to misrepresent their services. If they cannot guarantee it, they should not advertise it. They strictly prohibited from making false promises. This is why debt management companies should never promise to lower the interest rate of the consumer. This is only within the discretion of the creditor and is not a complete guarantee.
To know more about the telemarketing sales rule, visit the Business.FTC.gov site.
As you begin to understand that various debt relief laws, you will understand how the road to debt freedom should be like. It may be tough, but should never be abusive.