Editors' pick: Originally published August 19.
Mike Arman, a retired mortgage broker residing in City of Oak Hill, Fla., owns a nice home, with only $6,000 left on the mortgage. He's never been late on a payment, and his FICO credit score is 837.
Yet even with that squeaky clean financial record, Arman still went through the ninth circle of Hell with devilish debt collectors.
"The mortgage servicer would call ten days before the payment was even due, then five days, then two days, then every day until the payment arrived and was posted," he says. "I told them to stop harassing me, and that my statement was sufficient legal notice under the Fair and Accurate Credit and Transaction Act (FACTA). But they said they don't honor verbal statements, which is a violation of the law. So, I sent them a registered letter, with return receipt, which I got and filed away for safekeeping."
The next day, though, the mortgage servicer called again. Instead of taking the call, Arman called a local collections attorney, who not only ended the servicer's robo calls, but also forced the company to fork over $1,000 to Arman for violating his privacy.
"That was the sweetest $1,000 I have ever gotten in my entire life," says Arman.
Not every financial consumer's debt collector story ends on such an upbeat note, although Uncle Sam is working behind the scenes to get robo-calling debt collectors off of Americans' backs.
The latest example of that is a new Federal Communications Commission rule that closed a loophole that allowed debt collectors to robo call people with impunity.
Here's how the FCC explains its new ruling against robo calls.
"The Telephone Consumer Protection Act prohibits most non-emergency robo calls to cell phones, but a provision in last year's budget bill weakened the law by allowing debt collectors to make such calls when the debt is owed to, or even just guaranteed by, the federal government," the FCC states in a release issued last week. "Under the provision passed by Congress, debt collectors can make harassing robo calls to millions of Americans with education, mortgage, tax and other federally-backed debt."
"To make matters worse, the provision raised concerns that it could lead to robo calls not only to those who owe debt, but also their family, references, and even to someone who happens to get assigned a phone number that once belonged to another person who owed debt," the FCC report adds.
Under the new rules, debt collectors can only make three robo calls or texts each month per loan to borrowers - and they can't contact the borrower's family or friends. "Plus, debt collectors are required to inform consumers that they have the right to ask that the calls cease and must honor those requests," the FCC states.
That's a big step forward for U.S. adults plagued by debt collection agency robo calls. But the FCC ruling is only one tool in a borrower's arsenal - there are other steps they can take to keep debt collectors at bay.
If you're looking to take action, legal or otherwise, against debt collectors, build a good, thorough paper trail, says Patrick Hanan, marketing director at ClassAction.org.
"Keep any messages, write down the phone number that's calling and basically keep track of whatever information you can about who is calling and when," Hanan advises. "Just because you owe money, that doesn't mean that debt collectors get to ignore do-not-call requests. They need express written consent to contact you in the first place, and they need to stop if you tell them to."
Also, if you want to speak to an attorney about it, most offer a free consultation, so there isn't any risk to find out more about your rights, Hanan says "They'll tell you right off the bat if they think you have a case or not," he notes.
To stop robo calls, notify the creditor in writing that you do not want them to call anymore, says Steven Bazil, founder of The Bazil Group, an Exton, Pa.-based reinsurance law firm. "Send the letter via certified mail, return receipt requested," he says. "Keep a phone log, and include the day and time that you get a call from the debt collector. After you have notified them not to call you each time they do, it's a violation of the Fair Debt Collection Practices Act, and it may also be a violation of your state's consumer protection laws."
Under the FDCPA you can sue the debt collector for $1,000 for each violation, Bazil states. "You can file suit at your local district justice and you can represent yourself," he says. "They will need to retain counsel and defend the action. I have pounded the heck out of a number of creditors, for friends of mine. Yeah, it's that easy."
Going forward, expect the federal government to clamp down even harder on excessive debt collectors. "The Consumer Financial Protection Board takes complaints about debt collector behavior seriously, and has recently issued a proposal to further limit debt collectors' ability to contact consumers," says David Reiss, professor of law at Brooklyn Law School. "In the mean time, one concrete step that consumers can do is send a letter telling the debt collector to cease from contacting them. If a debt collector continues to contact a consumer -- other than by suing -- it may be violating the Fair Debt Collection Practices Act."
That's what happened to Arman, and he didn't wait to take action. If unscrupulous debt collectors are hounding you, you shouldn't wait, either.