NEW YORK (MainStreet) —  The Federal Trade Commission shut down a California-based debt collection operation on Wednesday, alleging it was deceiving and abusing consumers in an effort to get them to pay up.

In the FTC complaint, Rincon Debt Management is accused of calling consumers and their employers, family, friends and neighbors and posing as process servers seeking to deliver legal papers related to an unpaid debt. They also threatened phone call recipients with arrest when they refused to pay.

The FTC says, in many instances, consumers did not owe the debt the operation was trying to collect. However, even if they were responsible for the debts being cited, the actions cited in the complaint aren’t on the up and up.

For instance, while debt collectors can contact third parties to help obtain a debtor’s contact information, they’re generally only allowed to do so once and cannot talk to this third party about the debt at all, let alone threaten them with action if they don’t aid in collection.

When contacting consumers, debt collectors need to be transparent about why they are contacting them by disclosing the name of the company they represent, or the fact that they were calling to collect on a debt, during telephone calls to consumers (something the FTC alleges Rincon Debt Management failed to do). They also must notify consumers of their right to both verify and dispute the debt in question.

Here are some other things the Fair Debt Collection Practices Act prevents debt collectors from doing:

  • Calling debtors at inconvenient times. A debt collector may not contact you before 8 a.m. or after 9 p.m., unless you agree to it. Collectors also can’t contact you at work if they’re told (orally or in writing) that you’re not allowed to receive calls there.
  • Harassing debtors. Collectors cannot use threats of violence or harm or obscene language when addressing an unpaid debt. They also can’t call a consumer repeatedly or publish a list of names of people who refuse to pay their debts, although they can give this information to credit reporting companies.
  • Lying. Collectors cannot say a consumer will be arrested if they are unable to pay. They also can’t threaten to seize, garnish, attach or sell your property or wages unless they are permitted by law to take the action and intend to do so.
  • Charging extra fees. Collectors are not permitted to collect any interest, fee or other charge on top of the amount owed unless the contract that created your debt or state law allows the charge.

You can find more information about what to do if a debt collector doesn’t follow these rules in this MainStreet article!

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