FAQ: What To Do When Your Consumer Rights Are Violated?

Consumer Rights Questionnaire
Answer Yes to any of these questions and the company that contacted you may have violated the law.

Common current consumer issues include defective products, predatory lending, debt collection, credit reports, lemon lawsbankruptcy, foreclosure, payday loans, predatory mortgage loans, credit card debt, telemarketing fraud, refinancing, and other issues.  Aside from hiring a lawyer and filing a lawsuit you can contact local consumer agencies in your state, know the below facts and take the following steps:


A debt collector working on behalf of a creditor can demand payment.  If the creditor has not taken the client’s house, car, or other property as collateral on a loan, then legally the creditor can only stop doing business with the consumer, report a default to a credit bureau, and sue the consumer.  Typically, there are defenses to paying these debts or parts of them.  Further, the creditor must not only obtain a judgment from the court, he must take the difficult steps of collecting the debt, such as seizing money from a bank account, or garnishing part of the debtor’s wages or property.

Federal and state law prohibit harassment by collection agencies.  Consumers should try to stop the harassment before it starts by trying to deal with the creditor before the creditor refers the debt to a collection agency.  Consumers can call or contact the creditor to explain their situation.  Try to negotiate with the creditor before it is handed over to collection.  You can also try to negotiate with the collection agency once the debt is handed over to them. Only promise what you can deliver or pay.  Point out any billing errors. Explain your defenses.   You may wish to hire a lawyer to assist you in negotiating down the debt.

By law, collection agencies must inform consumers the first time they communicate with the consumer or within five days after the first communication of the consumers right to dispute the debt.  If the consumer then disputes the debt in writing within the next thirty days, the collection agency must stop collection efforts while it investigates.   If the dispute involves a credit card, a line of credit, or an electronic transfer of money, the consumer also has the legal right to require the creditor to investigate the bill.

To stop collection harassment, write the collector a cease letter. Consumer rights vary depending on whether the collector is a creditor or a collection agency.      Federal law requires collection agencies to stop collection efforts (“dunning”) after they receive a written request to stop. The federal law does not apply to creditors collecting their own debts, but creditors often respect such requests.  As proof that you sent the cease letter, send it certified mail and keep a written copy of the letter. If you feel your letter needs to be taken seriously, you may consider hiring a lawyer to write and send this letter and cite the federal law that prohibits debt collection harassment.

When a collection letter contains a mistake, consumers can write to request a correction and report the mistake or wrongdoing to the appropriate government agency such as the Federal Trade Commission or the consumer protection division of the state attorney general’s office.  A letter of complaint can be sent to the Consumer Response Center at Federal Trade Commission, CRC-240, Washington, D.C. 20580 (tel. 1-877-FTC-HELP (382-4357) or file a complaint on-line atwww.ftc.gov.   You can also file a complaint with the local better business bureau (www.bbb.org),  or the office of consumer affairs (www.dca.ca.gov)

Filing personal bankruptcy triggers an “automatic stay” and stops all collection activity from collectors, creditors, or even government officials, but should be used only where the consumer has serious financial problems.  Debt collection harassment can usually be stopped without having to resort to bankruptcy.  A bankruptcy attorney should be consulted before taking such a drastic step.

Debt Collectors can be sued for their illegal conduct.   Federal and state fair debt laws provide consumers with strong protections from debt collection harassment.  Debt collectors often break these rules because they know that in most cases they can get away with it.  However, the federal Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §1692 et seq.) prohibits collectors from engaging in abusive and harassing conduct.  Debt collectors and attorney debt collectors  that regularly attempt to collect debts are covered.  Original creditors and their employees are excluded from the federal law.

The Fair Debt Collection Practices Act prohibits collectors from communicating with third parties (spouses, parents , if the consumer is a minor, guardian, executor or administrator are not considered to be third parties).   There can be no communication at any unusual time or place (the law assumes that after 8:00 a.m. and before 9:00 p.m. is the only convenient time). There can be no communication with consumer if the collector knows the consumer is represented by an attorney.  Communication must then be with the lawyer.  There can be no communication at consumer’s place of employment if the collector knows or has reason to know that the employer prohibits such communication.  If the consumer notifies the collector in writing that the consumer refuses to pay the debt or wishes the collector to cease communication, the collector must cease communication with the limited exception to advise the consumer that the collector’s further efforts are being terminated; to notify consumer that the collector or creditor may invoke specified remedies; and where applicable, to notify the consumer that the collector intends to pursue specified remedy.  The collector can still sue on the debt.

The federal Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §1692 et seq.) includes a list of harassing tactics, including but not limited to, prohibitions on threats of violence; obscene language; causing a telephone to ring repeatedly; and placing calls without meaningful disclosure of the caller’s identity.  Further, collectors may not make false representations of the character, amount, or legal status of any debt.  They cannot threaten to take any action that cannot legally be taken.

In addition, the collector must disclose in the initial oral or written communication with the consumer that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and must disclose in subsequent communications that the communication is from a debt collector.

Collectors cannot collect any amount unless such amount is expressly authorized by the agreement creating the debt or permitted by law; accept a check or other payment postdated by more than five days unless certain conditions are met; solicit a postdated payment for the purpose of threatening or instituting criminal prosecution; communicate by post cards; use language or symbols other than the debt collector’s address on any envelope.  A business name is allowed only if the name does not indicate the collector is in the debt collection business.

Again, within five days after the initial communication, debt collectors must provide information about the consumer’s right to validate the debt.  Consumers have thirty days to dispute validity.  The collector must cease collection if validation is requested until the collector obtains verification of the debts.

Aside from bringing an individual lawsuit against a Debt Collector for improper practices, class actions lawsuits are also utilized where small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.  Class action lawsuits gives the common man the ability to take on the largest corporate or private entities.  Class action lawsuits are typically done at no cost to the class representative.  Attorney fees are determined by the court and often times the court will award incentive fees to the person who acted as the class representative.

The Law Office of Frederick S. Schwartz has been involved in and represented both individuals and class action members in consumer claims and lawsuits involving improper debt collection, improper credit reporting and debt defamation, consumer fraud and false advertising, pharmaceutical product defects, securities fraud and violations, mortuary improprieties, and other violations.