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Cease-Communication Letters

Debt collectors often try to wear down the resistance of consumers by repeatedly calling and harassing them. If this is happening, you can easily make it stop. Here’s how.

Debt Collection Strategies

Debt collection is a huge and growing industry in the United States, and collectors are notorious for some of the strategies they use to force and intimidate consumers into payment.

They’re Trying to Harass You

Debt collectors know that they people they are calling do not have much money-their purpose is to move themselves to the head of the line. The way they do this is by attempting to inflict more pain or annoyance on the consumer than other bill collectors. In other words, debt collectors know you only have so much money to pay your bills – they’re competing with each other. The company that harasses you the most “wins.” Sometimes individual debt collectors claim not to engage in abusive behavior, but rather to be the victims of it. I leave the reader to decide how much sympathy these debt collectors deserve, but my point is that, in general, the debt collectors seek emotional engagement – and, also in general – the best thing you can do is avoid it.

You Can Make them Stop Bugging You

The collectors are not concerned with your priorities or well-being, but you should be, and it is hard to keep a clear head amidst all the noise and all the people trying to use you. Luckily the Fair Debt Collection Practices Act (FDCPA) offers some help. Under the FDCPA, 15 U.S. Code Section 1692(c)c, “if a consumer notifies a debt collector in writing that the consumer wishes [it] to cease further communication with the consumer, the debt collector shall not communicate further…with respect to such debt.”

However, the collector may inform the consumer that it’s efforts are being terminated, or notify the consumer that it “may or will invoke specified remedies which are ordinarily invoked” (i.e., suing or reporting to the credit agencies). Many people fear that by invoking this rule they will cause the debt collectors to sue them – but this fear is probably misplaced (it is according to my experience). The debt collectors have their own guidelines based on what they expect to collect. If anything, writing a cease communication letter may reduce your chance of being sued because it keeps the debt collector from gathering more information about you.

What to Do to Make Debt Collectors Stop Harassing You

Crucially, if the notification is made by U.S. mail, the communication is complete “upon receipt.” In other words, to make sure the debt collector is forced to cease communications, it makes sense (although it is not required by the law) to send the letter by certified mail. That way you have proof that the debt collector received the letter. Any further communication would be in violation of the FDCPA.

When the phones stop ringing off the hook, you will be freer to make decisions according to your own best interests and priorities.

For More Help

Our Debt Collections Pack can give you a sample cease-communications letter and the guidance you need to keep the debt collectors off your back.

Who or What is a Debt Collector

The definition of “debt collector” became a lot less clear in 2018 when the Supreme Court ruled that owning a debt made one a “creditor” regardless of the status of the debt at the time of purchase. But there are still ways to prove that the company suing you is a debt collector. Doing so means they have to follow the FDCPA – or more particularly it means that if they don’t obey it you can counterclaim against them or file suit yourself.

The Company Suing You

The company suing you, if it’s one of the big debt collectors, probably still is a debt collector. As far as I’ve heard, these companies don’t really do anything other than buy debts and collect on them. But I doubt this situation will persist. After there is some litigation quantifying what makes an activity a “principle purpose” of the business, the debt collectors will likely buy subsidiaries or engage in some other business to an extent necessary to exempt them from the FDCPA. I would, and in this area of business and law, these guys are more knowledgeable and smarter than I am. Expect them to take steps to reduce their liability.

What Is a “Debt Collector?”and When Are You being Sued by One?

So who is a debt collector? Well, there is the classic debt collector – the company that a creditor hires to hassle debtors to pay bills to the creditor. In that situation, the debt collector is an agent of the original creditor and is supposed to follow certain rules (the Fair Debt Collection Practices Act).

There’s another kind of debt collector, though. This is a business or person whose “principle business” is the collection of debts. Just what percentage of business makes the activity the “principle purpose” of the business is not clear – I would suggest it is very significant, at least 90%. But that’s just a guess at this point, as there has been very little litigation on the point. It seems clear that a bank that makes lots of money on regular banking services and also has a junk debt buying subsidiary is probably NOT a debt collector.

There is a tremendous amount of confusion of who is suing you. People will tell me that they are “being sued by a debt collector, but the name on the suit is Capital One,” for example. They think that because the lawyer signs the pleadings, or a lawfirm shows up in court, that it is the lawyer who is suing them.

And in a very limited sense – but only in a limited sense – that is correct. For most purposes, the entity suing them is the one named as “plaintiff” in the lawsuit

Lawyers who Regularly Collect Debts Are Debt Collectors

The lawyer and law firm representing the company suing you are probably debt collectors within the meaning of the FDCPA. That means that their personal actions may bring them within the law, but it isn’t always clear when they will, though. It appears that if the pleading asks for something, the lawyer signing it will be liable (on the hook) personally (and his or her lawfirm, also) for the violation. But the company won’t always be liable for the actions of the lawyer – its agent – as would normally be the case for most things.

If the company was an original creditor, and the lawyer threatened you with suit, and you sought verification of the debt, would the company be unable to sue you using the same lawyer? Not likely. Because the company – not a debt collector – has no obligations to you under the FDCPA, and that’s where the right to verification comes from. If you filed a motion to dismiss the lawsuit based on the company’s failure to verify the debt, it should be denied.

The Name on the Lawsuit Is the Important Name

If your lawsuit says “Cap One vs. You,” you are being sued by an original creditor and not a debt collector. They don’t have to play by the rules that apply to debt collectors. That means they don’t have to verify the debt, and they can do some of the things debt collectors are not allowed to do. You need to direct you Answer, Defenses, and any Counterclaims with the awareness that the other party is the original creditor and not a debt collector. It means, for example, that they needn’t verify the debt before or after suit, and that an attack by you on the ownership of the debt is not going to work – their name is on the debt. There’s no “chain of title” issue where title has never passed to another company.

But how they act when they sue you may bring the lawyers within the FDCPA.