Debt Collection and Credit Reporting Issues Impacting Seniors

1. Debt Collection and Credit Reporting Issues Impacting Seniors JAMES A. FRANCIS Francis & Mailman, PC Land Title Building, 19th Floor 100 South Broad Street Philadelphia, PA 19110 Phone: 215-735-8600 Fax: 215-940-8000 E-mail: jfrancis@consumerlawfirm.com www.consumerlawfirm.com

2. Why seniors may be subjected to unlawful debt collection and credit reporting practices • Rampant Abuse in Collection Industry • FTC receives more complaints about debt collectors than any other industry, 140,036 in 2010 • Bad Debt Buying Industry has exploded • Seniors perceived as vulnerableand having access to income, even though may be fixed; • Often credit inactive

3. Two Important Laws that Protect Seniors and Consumers Generally: Fair Debt Collection Practices Act and Fair Credit Reporting Act • Federal laws which prohibit unfairness, deception and harmful tactics by debt collectors and credit reporting industry • Mandatory attorney’s fees provide for free/no cost representation by private lawyers; • Can recover $1000 statutory damages under FDCPA, plus any actual damages, FCRA actual damages • FDCPA “strict liability”statute/FCRA very specific as well

4. Resources Available To Seniors and Free Legal Help/Assistance • FTC and its website; • Consumer Financial Protection Bureau (CFPB) • Senior Law Center • Private lawyers/consumer advocates who will usually work on a contingency; • www.creditreportproblems.com

5. Common Unlawful Collection Practices • Repeated, harassing and abusive phone calls; • Contacting family, neighbors and 3rd parties to embarrass consumer into paying debt; • Lies/deceptions/misrepresentations—too many to list • Reporting debts on credit report that are prohibited

6. STOPPING REPEATED AND HARASSING PHONE CALLS AND LETTERS • FDCPA prohibits harassing and abusive communications generally • No calls before 8AM or after 9PM • Right to demand verification/validation of a debt • Right to impose “cease and desist” on communications • The Telephone Consumer Protection Act, its applicability, cell phones and the Do Not Call List

7. SAMPLE CEASE AND DESIST LETTER Date Your Name Your Address Your city, state, zip code Name of Collection Agency Address City, state, zip code Dear Sir/Madam: After being contacted on numerous occasions by employees of your agency, I am writing to demand that you cease and desist contacting myself or anyone else regarding this debt and in the future only contact me through US Mail. I also request that you send written verification that I owe this debt to your company. Sincerely, (sign here) Your name

8. Stopping Contact with 3rd Parties • FDCPA prohibits debt collectors from speaking with 3rd parties about a debt except for “location information” • FDCPA prohibits calls to the workplace/employer if debt collector knows consumer cannot take calls there

9. Common Lies and Misrepresentations Punishable Under FDCPA • Consumer will be arrested or go to jail • Threatening to sue or suing on old debts • Social Security income is attachable • “Sheriff is coming” to take house, cars or other property • Senior liable for debts of children/family members • Client SeenaRosenberry case and the CBS story • Children/family liable for debts of senior • Senior liable for medical billing/Medicare submission errors • Debt will be reported on credit report even though old

10. Misreporting Debts/Account Information • Reporting false or otherwise prohibited information on consumer’s credit report • Both FDCPA and FCRA prohibit false credit reporting • Increasingly utilized tactic because of the “leverage” and pressure it creates and growing consumer awareness

11. Frequently Violated Credit Reporting Prohibitions • Reporting negative information after 7 years/Debt Reaging • Reporting account without noting that it has been disputed by the consumer • Reporting prohibited information about medical bills/procedures (including reimbursement submissions)

12. Debt Reaging: A Common Practice With Collection Accounts • Debt Collector buys delinquent or past due account that is older than 7 years • Age of debt relates to “date of first delinquency” • Debt Collector assigns the date of collection as the date of first delinquency, reaging debt another 7 years;

13. Broad Dispute Rights Under FDCPA and FCRA • FDCPA section 1692g • FDCPA section 1692e(8) • FCRA section 1681i and 1681 s-2(b)

14. FDCPA 1692g Dispute: Validation/Verification • DC must advise consumer of right, and specifics of the debt (clearly outline the debt and creditor to whom owed) • Within 30 days of first communication from a debt collector, and within writing • Gives consumer right to demand that debt collector provide verification or “proof” of the debt • Debt Collector must cease collecting during verification period

15. FDCPA Section 1692e(8) • Prohibits debt collector from reporting the debt to anyone, including a credit reporting agency without noting its disputed status • Dispute can be orally or in writing • Failing to note the disputed status an automatic violation;

16. FCRA Sections 1681i/1681s-2(b) • Apply to credit reporting agencies and creditors, not just debt collectors • Require both to conduct an investigation of the consumer’s dispute, and failing to do so allows consumer to sue for damages • Dispute MUST be made to the CRA • Even if the investigation results in verification of the debt/account, must still report disputed status

17. SAMPLE DISPUTE LETTER Date Your name Your address Your city, state, zip code Name of CRA and/or furnisher [Equifax, Experian, Trans Union] Address City, state, zip code Dear Sir/Madam: After reviewing my credit report, I am writing to dispute the following inaccurate information. I am listing each item along with the way it should be corrected: [Account name] [Account number] [How it should report/Why it’s inaccurate*] Supporting documents have been enclosed. Pursuant to the FCRA, please forward them to the credit furnishers. If you are not going to forward them, please inform me so I may do so myself. Sincerely, (sign here) Your name Your Social Security Number Your Date of Birth Enclosures: (list what you are enclosing – examples: police report, fraud affidavit, proof of payment, etc)

18. The Role of Identity Theft. What is it? • Use of someone’s name and personal identifying information to buy goods, obtain money and use credit • Seniors sometimes targeted because often not credit active

19. The Most Common Forms and Causes Today • Secret Credit Card Swiping • ATM Fraud • Mail left at old addresses

20. How to Guard Against It • Order Credit Report Regularly • FACTA/FCRA now permits free report once a year from each of the CRAS • Look at credit history AND inquiries for creditors you don’t recognize

21. What to do if it Happens • Fraud Alerts • Invoking FDCPA right to demand verification/validation • Fair Credit Billing Act for Charges • Right to Disputes to Big 3 CRA’s and debt collectors