Collection agencies often have large amounts of resources available to them to collect a person’s debt. They can obtain wage garnishments, they can repossess property and foreclose on liens. This can be very intimidating to debtors in Tennessee and other parts of the country. However, this power has a limit and when creditors cross the line between debt collection and creditor harassment, consumers have legal rights.
Recently, the Consumer Financial Protection Bureau brought a lawsuit against a major national credit collection law firm. According to the government, this law firm was nothing more than a giant credit collection company working for some of the nation’s biggest banks and credit card companies including Capital One, Discover, Bank of America and JPMorgan Chase.
According to the suit, the firm created 138,000 lawsuits against consumers in just two years. They claimed that attorneys were told to spend less than one minute reviewing each file before starting the suit, which the bureau argues does not amount to legal work.
Instead, the bureau says the firm was filing lawsuits without doing basic checks about who even owed a debt. It was using intimidation to try to get people to pay debts — whether or not they actually owed them. The bureau is asking the court to order the firm to pay restitution to consumers and to change its collection practices. The firm denies wrongdoing.
When Tennessee consumers have been subjected to creditor harassment, they should know that they have rights. Collection agencies do not have the right to intimidate, harass or bully consumers into paying debts, even if there has been a default on payments. Furthermore, people may have options that can stop the harassment altogether including filing for bankruptcy.
Source: The Seattle Times, “US consumer bureau sues debt-collection law firm,” Jeff Horwitz, July 15, 2014