by Emery P. Dalesio
Posted By Michael Rivezzo
With many Americans in dire financial straits, states are cracking down to make sure aggressive debt collectors target only people who legitimately owe them money.
National consumer credit laws already prohibit collection agencies from harassing, deceptive or unfair practices like telling neighbors or family about what is owed, or calling before 8 a.m. or late at night. Since the recession started, at least a half-dozen states have adopted additional limits, like imposing statutes of limitation on collections and adding opportunities to punish abusive practices in court. Other states may follow suit.
Lawmakers are increasingly focusing on outfits that buy bad debt from credit card companies and other lenders for pennies on the dollar and profit when they collect more than they paidDebtors – some agree they owe money, others say they’ve already paid or are disputing their bills – have reported being bombarded with calls and subjected to foul language and threats of arrest or deportation.
A North Carolina law that took effect this month requires debt buyers filing collection lawsuits to produce documents proving they’re the ones owed the money. Trying to collect on a debt that a company should reasonably know is invalid could lead to lawsuits and civil penalties of up to $4,000 per violation.
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