Debt Collectors Who Cross the Line

The Dellutri Law Group represents consumers against debt collectors harassing individuals. Each week, our firm receives numerous e-mails asking questions about consumer defense and litigation law, specifically on the topic of what debt collectors can and can’t do when trying to collect delinquent debt.

Recently, we received the following question: “I had a debt collector call my neighbor, who is not affiliated with me or my debt in any way. I called the debt collector agency back, and they told me they found my neighbor’s phone number on the internet. The debt collector also told me that they would take my husband’s 401k savings to satisfy the debt if we refused to pay.

Can debt collectors call my neighbor about my debt? Can they take money in a 401k to satisfy the debt?

The short answer to both of those questions is an emphatic NO. Let’s take a look at why. First of all, this debt collector should not be calling anybody except for the debtor with respect to any given debt. Debtors in the state of Florida are protected from certain collection practices by a statute known as the Florida Consumer Collection Practices Act (FCCPA).

The FCCPA makes it illegal for debt collectors to do a number of things when attempting to collect a debt, including:

  • Pretending to be an attorney or law enforcement agent when communicating with a debtor;
  • Threatening force or violence in an attempt to intimidate the debtor into paying;
  • Using profane, obscene, vulgar, or abusive language when communicating with the debtor or members of the debtor’s family;
  • Communicating with a debtor or members of a debtor’s family with such frequency as can be considered harassment;
  • Communicating with a debtor whom the debt collector knows to be represented by an attorney with respect to the debt it is trying to collect; or,
  • Attempting to enforce a debt that the debt collector knows cannot legally be enforced.

The FCCPA also makes it illegal to “disclose to a person other than the debtor or her or his family information affecting the debtor’s reputation, whether or not for creditworthiness, with knowledge or reason to know that the other person does not have a legitimate business need for the information or that the information is false.” See Florida Statute 559.72(5). So, a debt collector may be in violation of the FCCPA for calling your neighbor, depending on what the debt collector discloses to your neighbor.

Under the FCCPA’s Federal counterpart, the Fair Debt Collection Practices Act (or “FDCPA” for short), however, it doesn’t matter what the debt collector says to your neighbor. A debt collector is prohibited from communicating with any third party (with certain exceptions for attorneys and other parties permitted by law) regarding your debt unless you directly give the debt collector consent to contact such parties. See 15 U.S.C. 1692c(b). So, under the FDCPA, it doesn’t matter what the debt collector tells your neighbor--merely by calling them about your debt, the debt collector may have violated the law.

Secondly, money in a 401k account that meets the Internal Revenue Code’s requirements (something you’ll have to verify with the entity administering the account and/or an experienced tax attorney) is exempt from all claims of creditors in the state of Florida pursuant to Florida Statute 222.21.

If debt collectors tell you differently, they are threatening to take legal action that they know (or should know) is not legitimate. Such a threat may very well be a violation of the FCCPA under Florida Statute 559.72(9), as well as a violation of the FDCPA under 15 U.S.C. 1692e(5) and (10). While debt collectors certainly have a right to pursue money owed to them, they have to play fairly in doing so.

The FCCPA and FDCPA, among other statutes, are designed to protect consumers from abusive debt collectors. Despite the existence of these statutes, many creditors and debt collectors continue to use unfair, deceptive, and otherwise unconscionable methods to collect money from debtors, counting on the fact that many people are ignorant of their rights with respect to debt collection.

Don’t be one of those people! If a debt collector is taking actions you believe to be illegal, consult a consumer litigation attorney immediately. At the Dellutri Law Group, we provide representation to individuals who are being abused or harassed by debt collectors.