Shaming The Debtor? No… Shame on the Creditor/Collector!
Scenario: Person owes you a debt and refuses to pay. You call the person and send letters and emails but they merit no response. So you have an idea….what if you can shame the person into paying? Yeah…that’s the ticket. Post the person’s name and the amount owed in places where you know that third persons can and will see the information. That will get the job done and teach them a lesson…….errr…on second thought, once we consider the applicable law maybe that is not such a good idea after all.
Federal and state law prevent publication of certain information about people who owe debts which are not part of a public record. The postings of the names and amounts due and other info about debtors are commonly referred to as “deadbeat lists”. While federal law, the Fair Debt Collection Practices Act, only applies to the actions of debt collectors (a/k/a persons or entities collecting debts not owed to them) in North Carolina there is a statute that applies to debt collectors and creditors collecting on a debt. The North Carolina statute is N.C.G.S. 75-53 which is entitled “Unreasonable Publication” and states the following:
§ 75‑53. Unreasonable publication.
No debt collector shall unreasonably publicize information regarding a consumer’s debt. Such unreasonable publication includes, but is not limited to, the following:
(1) Any communication with any person other than the debtor or his attorney, except:
- With the written permission of the debtor or his attorney given after default;
- To persons employed by the debt collector, to a credit reporting agency, to a person or business employed to collect the debt on behalf of the creditor, or to a person who makes a legitimate request for the information;
- To the spouse (or one who stands in place of the spouse) of the debtor, or to the parent or guardian of the debtor if the debtor is a minor and lives in the same household with such parent;
- For the sole purpose of locating the debtor, if no indication of indebtedness is made;
- Through legal process.
(2) Using any form of communication which ordinarily would be seen or heard by any person other than the consumer that displays or conveys any information about the alleged debt other than the name, address and phone number of the debt collector except as otherwise provided in this Article.
(3) Disclosing any information relating to a consumer’s debt by publishing or posting any list of consumers, except for credit reporting purposes and the publication and distribution of otherwise permissible “stop lists” to the point‑of‑sale locations where credit is extended, or by advertising for sale any claim to enforce payment thereof or in any other manner other than through legal process. (1977, c. 747, s. 4; 1979, c. 910.)
Case in point: I recently represented woman who owed homeowners association dues and was put on blast by the homeowners’ association and/or the property management group. Her name and the dues amount she owed was posted in public on a frequent basis for several years. I represented the woman and we filed suit against both the HOA and property management group. After much finger-pointing and hand wringing between the two defendants we obtained a favorable settlement.
The interesting thing is that my research revealed several articles and resources intended to dissuade HOAs from engaging in this practice. Click here and here. I wonder if either the HOA or the property management group consulted counsel before they began shaming HOA members who had fallen behind on their dues? Note that the statute cited above does not apply just to the collection of HOA dues. It applies to the collection of any debt.
Another interesting note: Here is a “deadbeat list” blog (albeit dated) apparently created by some members of a HOA in Florida. In light of my blog post and the relevant law is this blog REALLY a good idea? Hmmm…….. the folks behind this “deadbeat list” blog better hope the statute of limitations has run on potential claims and they better make sure their insurance polices are paid up.
Lesson for you: do not assume the threats and actions of a debt collector are legal. While it is true that one has a right to collect on debts owed, like most other things in life there are rules to be followed. If you believe you have been the victim of unfair or harassing debt collection tactics contact an experienced consumer law attorney for a consultation.
- Posted in: Debt Collection Defense ♦ Unfair Debt Collection
- Tagged: creditor, deadbeat list, debt collector, debtor, Fair Debt Collection Practices Act, homeowners association dues, illegal, lien, North Carolina Debt Collection Act, posting, private, public, shame, third party, unreasonable publication