Calls from debt collectors can add to the stress of having financial problems.  When these calls involve harassment, threats and intimidation, the situation can get worse–especially if you don’t know your rights

In 2014, the Federal Trade Commission filed a complaint against National Check Registry for violating the Fair Debt Collection Practices Act by using outrageous and intimidating methods to get people to pay debts immediately, often debts that were in dispute.  The company will tell the victims that they had committed check fraud or another crime and threatening them with lawsuits, garnishments, arrest or imprisonment if they don’t pay within 12 or 24 hours.

According to the FTC complaint, National Check Registry has no authority to make arrests or seek other criminal punishments for failure to pay these debts.

For additional information go to

http://www.consumer.ftc.gov/blog/stop-debt-collectors-empty-threats

Teaching Suggestions

• Ask students what actions are commonly recommended if a person has difficulty making credit payments.
• Ask students to outline the actions they should take when they receive phony debt collection calls.

Discussion Questions

1. Are debt collectors allowed to discuss your debt with anyone other than you, your spouse or your attorney?
2. What can you do if you think that a debt collector has violated your rights?

If you do not pay your bills, you’ll probably get calls from debt collectors.  Their job is to force you to pay or make arrangements to pay.  But any debt collector who harasses or threatens you is breaking the law.

In August 2014, the Federal Trade Commission alleged that Credit Smart used illegal tactics to pressure people into paying debts.  According to the Federal Trade Commission’s complaint, the company threatened to garnish peoples’ wages and sue them for nonpayment.  The Federal Trade  Commission’s complaint alleges that sometimes Credit Smart told people they owed debts and interest without having  a reasonable basis to say so, misrepresented themselves as working for attorneys or a financial relief counselors, and failed to tell people they were debt collectors.

For additional information, go to

http://www.consumer.ftc.gov/blog/when-debt-collection-illegal-0

Teaching Suggestions

• Ask students what is the best way to solve debt problems before the delinquent account is turned over to debt collectors.
• What can people do to avoid debt problems in the first place?
• Why should people with debt problems seek the assistance of Consumer Credit Counseling Services?

Discussion Questions

1. How can companies, such as Credit Smart, harass people when they know it is illegal to engage in such practices?
2. What are the major provisions of the Fair Debt Collections Practices Act that specifically prohibit certain actions by debt collectors?