Debtors Have Rights Too!


OK…..you have a debt…..and you got behind on your payments……now the calls are coming…..”Mr. Jones, this is Mr. Debt Collector calling from Big Bad Company.  We are calling you because your account is delinquent.  Please call me at _______ to discuss a resolution”.  The calls are coming throughout the day at work and home.  Big Bad Company has even called a couple of members of your family and one neighbor……….what do you do?  what can you do?

KEY NOTE:  Under federal law there is a significant difference between being a creditor and a debt collector.  A “creditor” is “..any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another“.  A “debt collector” is “..any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another“.  The Fair Debt Collection Practices Act (FDCPA) only applies to debt collectors; NOT to creditors

Compare..  The North Carolina Debt Collection Act applies to any person or entity collecting on any debt owed or due or asserted regardless of to whom the debt is owed.

So if Big Bad Company is collecting on its own debt it’s actions are governed solely by the North Carolina Debt Collection Act (NCDCA).  The FDCPA does not apply.  Key takeaway:  the term “debt collector” has a broader (more protective for the debtor) definition under North Carolina law than under federal law.

First, give serious consideration as to whether you can work out a payment plan or other resolution for bringing the debt back to a “current” or non-delinquent status.  While you have the right to send a cease and desist letter to Big Bad Company realize there are some unintended consequences which may work against you.  If you opt to send the cease and desist letter Big Bad Company must conduct all further communication with you regarding the debt in writing—only.  Send your letter certified mail, return receipt requested so you can ensure it is received. 

CASE IN POINT:  Whataburger, A Texas-based fast food chain, sent a cease and desist letter to a national debt collector who was continuously calling the company headquarters’ toll-free phone number to get a company employee to pay an alleged debt. When the debt collector continued calling even after receiving the letter, Whataburger sued the debt collector……What a Great Move!  The suit is still pending..

Can Big Bad Company contact your family and friends regarding your debt?  Yes and No.  The FDCPA prohibits debt collectors from calling third-parties, such as family members or friends, with one exception:  debt collectors may contact third-parties to obtain your address or phone number.  Once the debt collector this information, however, he cannot contact the third-party again. And during his conversation with the third-party, the debt collector cannot tell the third party that you owe a debt, cannot discuss the details of your debt, and can only identify himself and his company if asked.  The NCDCA contains a similar but even stronger provision in favor of protecting the debtor’s financial privacy.

When can Big Bad Company contact you regarding the debt?  It depends….under the FDCPA a debt collector may call you any day of the week including Sundays and all holidays but “..without the prior consent of the consumer given directly to the debt collector… a debt collector may not communicate with a consumer in connection with the collection of any debt… at any unusual time or place known or which should be known to be inconvenient to the consumer.”  The FDCPA continues by advising that “in the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after [8:00 a.m.] and before [9:00 p.m.], local time…”  Thus, if a debt collector does not know or should not know when a convenient time is, he or she cannot call before 8:00 a.m. or after 9:00 p.m.  The NCDCA requires a debt collector identify herself, prevents excessive and harassing calls, and even prevents phone calls at a debtor’s place of employment unless the debt collector lacks a non-work phone number for the debtor.

The FDCPA and the NCDCA provide protection to persons who owe debts.  If you believe a debt collector or creditor has violated the law regarding the handling of your debt contact an experienced debt collection defense lawyer for a consultation.  You may be entitled to recover damages and attorney’s fees.

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    1. Lawyering the Lawyers and Protecting the Consumers | Law and Life Blog
    2. Debt Collection A to Z: U is for Understanding | Law and Life Blog
    3. Debt Collection A to Z: Y is for Yellow–The Color of Rogue Debt Collectors | Law and Life Blog

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