Posts Tagged ‘ftc’
Today’s Financial Headlines
August 6th, 2010Using the Cease & Desist Letter: Know the Facts
May 18th, 2010CEASE AND DESIST LETTER FOR STOPPING DEBT COLLECTORS
When and when not to use a cease and desist order for debts
This article is one of our most popular from the credit library. You can view the related resources linked within which are located on the main web site.
If a debt collector claims you owe them money, you are allowed by law the cease the debt collector from further contacting you. Many people misuse a cease and desist letter and believe that once they send it, the collection agency may never contact them again. This is not true. Not only can the debt collector contact you one last time to advise you of their intent, if any, but they can still sue you. Using a cease and desist letter can be very useful but it doesn’t solve all collection issues.
If you don’t owe the debt then using a cease and desist letter will be affective, however if you owe the money, the debt collector can still come after you via lawsuit. Here are the steps you should take when implementing a cease and desist order to a collection agency.
Top priority. Do you owe the debt?
If you feel the debt is not yours or is expired legally under the SOL- statute of limitations, then the cease and desist letter will be very affective. If the debt collector receives the letter from you stating that the debt is legally expired and to cease all communications then you probably wont hear from them again. The collector isn’t going to waste time going after you if they know you know the debt is expired. Pouring good money after bad isn’t their aim. If they continue to contact you after you have sent the cease and desist letter then you could bring damages upon them for harassment.
What law allows a cease and desist order to a collector?
The Fair Debt Collection Act – FDCPA protects you from being harassed from a collection agency. If a collection agency violates the FDCPA they can be sued. Additionally you may report them to your Attorney General, the FTC and the Better Business Bureau. Basically, you can make it very hard on them for a violation but just be sure you have a case. You may collect up to 1,000.00 for damages.
When a cease and desist letter is not appropriate
If a debt collector is sending you a bill and its an accurate bill, your cease and desist letter probably wont do much. Sure, they may leave you alone for a month while they gather evidence of the debt, but chances are pretty good that they haven’t gone anywhere. If the debt is accurate and you do owe it, your best option would be to try and settle the debt for pennies on the dollar and an improved credit rating. Collection agencies are in this business to make a buck, so you’d be surprised how often they DO settle debts for less and promise to remove the item from your credit reports as well. They want money pure and simple. If you do work with a collector on settling the debt, be sure everything is done in writing and sent certified mail. If you agree to pay the debt and they agree to accept less, then they should have no problem putting it in writing for you. If they refuse, chances are they will not abide by their promise to remove the debt from your credit reports.
The Validation of Debt angle
Before you assume the debt is valid and pay it, be sure it is. Hundreds of thousands of debts are sold everyday but that doesn’t mean its a legitimate debt. Before you pay a dime, be sure to check that the debt is valid. Decide if the balance is accurate as well as any applied fees or collection expenses. If the debt collector cannot prove the debt is valid then you have a good case for ceasing and desisting them from further contact. If they cant prove to you the debt is valid then they certainly wont be able to prove it to a judge in small claims court.
Related Help for Collection Agency Issues
FAQ on Car Repossession and Your Credit
December 11th, 2009People often think that their credit isn’t negatively affected if they turn their car in, if unable to make payments. The truth is that there are two types of repossessions. One is called a voluntary repo and the other is a repo. A voluntary repo happens when you initiate the repossession by giving the car back to the lender. This type of repo shows up on your credit reports as voluntary.
A regular repossession is when the lender initiates the repossession. Its a myth that a voluntary is less damaging to your credit. Both are negative.
What about the deficiency balance, am I responsible?
Yes. Just because you turn the car in or let the lender take it back doesn’t mean that you do not owe any remaining balance. If the lender is unable to sell the car for the full balance then you will be held liable for the rest. This remaining balance becomes an unsecured debt because the car is no longer physically attached to it. The lender may sue you for this balance if you refuse to pay it.
Is it possible to remove a repossession from my credit?
It’s possible to remove anything from your credit if it is inaccurate or obsolete in any way. The FCRA makes lenders and credit bureaus report accurate information, therefore if you believe the repossession is inaccurate or false and the lender or credit bureau cant prove it, it must be removed. Credit repair agencies usually use this tactic to dispute a repo.
What if I cosigned for the car?
You are legally just as responsible as the borrower if you co-signed for the car loan. If the loan goes unpaid, it will affect your credit as well. A repossession stays on your credit for seven years.
Read more about repossessions, getting the property back, legal issues and balance deficiencies here.
Do it yourself credit repair and creditor letters | Credit repair attorneys | Car loans for bad credit | Debt Relief | Settle your deficiency balance | FTC on car repossessions | Wiki on auto repossessions | Bankruptcy attorneys | Bankruptcy and a repossession
FTC & Senator to push Free Credit Report Offers for clearer disclosures
November 11th, 2009
The Internet is littered with free credit report offers and most of them want to give you a free credit report but they don’t blatantly disclose that you are paying for a monthly service along with the free credit report.
The search term “Free Credit Report” is an expensive one on Google, with advertisers paying upwards of $14.00 per click to be number one in the advertisers section of the search results. It’s big business and everyone wants a piece.
The Federal Trade Commission has long wanted these types of sites to provide more blatant disclosures to consumers as to exactly what they are paying for, but resistance stands forward and the consumers often don’t realize they are being charged after they get the free credit report.
Senator Schumer has a very simple fix for this. He says give the consumer the free credit report first- without asking for their credit card. After they receive it completely free (as advertised) they can then opt in for the monitoring service at a monthly fee.
What a concept! This would certainly help with all the confusion and reduce the number of chargebacks the credit providers must deal with, however it will certainly decrease sales.
According to the New York Times the senator said;
If these companies want to say — or sing for that matter — that they are giving people free credit reports, then they can’t charge people $15 a month, simple as that,” Mr. Schumer said in the release. “For years, these companies have said with a smile that they will provide a free credit report -– even though the government already requires a credit report be provided for free every year -– and then suddenly, months later, consumers get a bill in the mail for their credit-monitoring services. My plan would finally bust up this scam and give consumers some honest choices.”
Annualcreditreport.com offers consumers a free credit report from all three bureaus once a year and yes, its really free. The FTC and the Senator think that should also be more obvious on the websites of credit providers so that consumers may make a wise choice. Perhaps more disclosures in bigger bolder font and obvious words like “with trial” should also be implemented.
If a person can use AnnualCreditreport.com for their free credit reports and a monitoring service like Lifelock if they so choose to, its much cheaper. The bottom line is you are paying for continual monitoring with most of these services and you may not need it. At least with Lifelock, you know exactly what you are paying for and there is no smoke and mirrors.
The senator is looking to introduce legislation to force these changes if the FTC is unable to get cooperation from the credit report providers.
Debt settlement options, be wary
October 28th, 2009If you’re struggling to pay your bills and are desperately trying to avoid bankruptcy then you may decide debt settlement is for you. With debt settlement you can pay back what you owe, often for pennies on the dollar and consider the debt paid in full. Many debt settlement programs have helped thousands and thousands of consumers and businesses avoid bankruptcy, however home work by the consumer is still needed.
Recently, a debt settlement firm was ordered to pay damages and restitution in NY for apparently putting consumers in worse financial straights than before they took on their case. The AG for NY ordered that money be paid back for the damage before the company could operate again in that state.
New York State Attorney General Andrew Cuomo said Thursday that a state judge has ordered a debt-settlement company to pay nearly $200,000 in civil penalties for allegedly fraudulent business practices and false advertising.
In a statement, Cuomo said Nationwide Asset Services Inc. of Phoenix was ordered by New York Supreme Court Justice Patrick H. NeMoyer in Buffalo, N.Y., to pay $198,100 in civil penalties and to post a $500,000 performance bond before it can do business in New York state.
“This company made promises to people who were searching for financial help and trying to turn their lives around,” Cuomo said. “But the promises never came true and, in many cases, New Yorkers were left in worse condition than when they started.”
While the Internet brings us convenience for things like news, shopping, and connecting to people, it brings with it a whole lot of scams and opportunities for businesses to reach out to the masses very quickly. With that, consumers often feel a net of safety and hire financial experts, who in person, they may have never hired.
Debt settlement programs are very affective and can help thousands of people but the old adage caveat emperor still holds true– buyer beware.
Make sure you check out the debt settlement company before you hire them. Do a quick background check by Googling the company, checking their Better Business Bureau record and be sure to review their terms of service before you sign up for anything.
Related debt settlement links
Watch a free video on how debt settlement works and see if its right for you
Did you know there are DIY debt settlement programs that will teach you what the experts know? You could save thousands by doing your own settlement offers with your creditors.
Is a collection agency hounding you for an old debt? Did you know that legally you may not have to pay it? Check the statute of limitations to see if your debt is legally expired.
Debt counseling may be the answer you are looking for if you do not have funds to settle your debts. Careone is a leading credit counseling source that can help you quickly and with a free consultation.
Debt Settlement Can Hurt More Than Help – The Early Show – CBS News. Early Show financial contributor Vera Gibbons shared some warnings about using those companies on the show Tuesday.
FTC Facts for Consumers: Knee Deep in Debt (PDF) Help from the Federal Trade Commission on debt problems.
Credit Repair is a dirty dirty word
October 15th, 2009There was a very interesting article today on ABC news about credit repair companies and how they scam millions of dollars out of consumers each year.
The article spoke of a recent crackdown by the Federal Trade Commission on companies claiming to be Real Estate, but in reality the service was cloaked in real estate but pitched credit repair. People who showed up for a seminar relating to real estate were pitched the credit repair side of the business. Not wise and certainly shady.
What was most interesting about the article however, wasn’t the article itself, but the comments left by people. It was surprising to see comments defending credit repair and calling the writer “biased”.
One commenter said, ” agree… I was at the Dept. of Public Safety to get my Drivers License and they also wanted me to PAY up front before rendering service. They said they would mail it to me. Are they also a Scam for charging UP FRONT? The same thing happened at to me at Subway today when I got lunch.”
Touche! That’s a very interesting point that commenter made. While it isn’t legal to charge in advance for credit repair (because of federal law), is it fair for a company to render a service for free? If the company is actually mailing letters on your behalf and working to help fix your credit issues, then shouldn’t they be paid for their time?
Sure critics will say that its impossible to fix your credit and therefore you should never pay anyone, BUT the system simply doesn’t operate that way. Over half of all negatives in 1 out of 4 credit reports is wrong. If the consumer finds they are unable to correct the issues because of the red tape of the credit bureaus, then it should be their right to hire someone to aid them.
It’s a touchy topic whenever you broach the issue of credit repair. The best method is to always research whomever you hire and make sure the service is legitimate. It’s the same as with any other service, you check out who you are hiring before you hire them.
If you are skittish about anyone having your personal information then there is always the route of self help. Doing your own credit repair can be done, but you do need to commit yourself to the process because it does take some time.
Also be aware that there is nothing that a credit repair firm can do for you that you cant do BUT they can do it much faster and probably with way fewer mistakes because its all they do.
Bottom line is that credit repair will always be a dirty word because there are hundreds of fly by night companies who claim to fix credit but in reality do nothing but steal your money. Buyer beware should hold firm no matter what the service.
Debt Settlements under fire
August 4th, 2009The Federal Trade Commission is cracking down on debt negotiation firms. The process of settling debts for less than owed is coming under scrutiny just like credit repair firms. With these negotiators popping up all over the place and saturating the Internet, its easy to see why there is need for federal regulations.
Many of these so called debt settlement companies are collecting fees up front from consumers while there is still no promise of a settlement. The consumer can still be harassed by the collection agencies or creditor and further damage their credit rating.
Using a reliable firm is an affective way to get the most out of your settlement dollars and credit rating. Before you agree to work with a debt settlement company, be sure to check out their record with the Better Business Bureau and do a Google search of them to uncover reputation facts.
You need to be proactive in the settlement process and not just trust your debts to a stranger. You can read more about the proposed debt settlement enforcements here.
Accuracy of Credit Report Information and Allowing Direct Disputes
July 15th, 2009Agencies Issue Final Rules on Accuracy of Credit Report Information and Allowing Direct Disputes
Basically what this change means is that even if you have ceased and desisted a collection agency, they must still answer your disputes and not claim that they cant because you have ceased them.
The Federal Trade Commission today announced final rules and guidelines that will promote the accuracy and integrity of information provided to credit reporting agencies (commonly called “credit bureaus”) and allow consumers to dispute inaccurate information about them directly with furnishers, the financial institutions and other entities that furnish the information to the credit reporting agencies.
Information in credit reports is used widely to determine a consumer’s eligibility for credit, employment, insurance and rental housing, and errors in a consumer’s report can result in denial of those benefits or higher costs.
The FTC is issuing these rules and guidelines with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision (the Agencies) under section 312 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which amends the Fair Credit Reporting Act. The effective date for these final rules and guidelines is July 1, 2010.
The Accuracy and Integrity Guidelines and Rules
The Agencies have issued guidelines specifying the actions for furnishers to take to ensure the accuracy and integrity of the information they furnish to credit reporting agencies, as well as rules requiring each furnisher to establish reasonable policies and procedures for implementing the guidelines. For example, the guidelines provide that, under circumstances specified by the Agencies, furnishers should report certain additional information when necessary to keep information they report from creating a misleading impression about a consumer’s creditworthiness.
The guidelines specify one such circumstance – furnishers generally would need to include a consumer’s credit limit among the information they furnish to a credit reporting agency. The Agencies today are issuing an Advance Notice of Proposed Rulemaking to identify other possible information that furnishers should report, such as the date the account was opened.
The Direct Dispute Rules and FDCPA Advisory Opinion
The Agencies also have issued final rules requiring furnishers in most cases to investigate disputes that consumers submit directly to them regarding the accuracy of information that the furnishers reported to a credit reporting agency.
Previously, the law encouraged consumers to submit their disputes through a credit reporting agency, rather than directly to a furnisher. The final rules add an additional avenue for consumers to dispute possible credit report inaccuracies, but do not remove or change consumers’ existing right to file a dispute through a credit reporting agency.
In an action related to the direct dispute rule, the Commission is issuing an advisory opinion concluding that a debt collector does not violate the Fair Debt Collection Practices Act by responding to a direct dispute via a communication whose sole purpose is to comply with the direct dispute rule by stating either the results of the investigation or the collector’s belief that the communication is frivolous or irrelevant.
Section 805(c) of the Act provides that, if a consumer has notified a debt collector in writing to stop communicating with the consumer, the collector must stop communicating with the consumer about the debt. The advisory opinion clarifies that, even if a consumer has asked a debt collector to stop communicating about a debt, the debt collector must still respond to the consumer’s direct dispute, as required by the new rules.
The final rules and guidelines, which will be published soon in the Federal Register, are attached. The Commission vote to issue the rules and guidelines was 4-0.
