Many Americans struggle with personal debt. In 2020, people faced unprecedented issues due to job layoffs or loss, many related to the Coronavirus or COVID-19 pandemic.
Cell phone debt collection calls rose to new heights as creditors ramped up efforts to retrieve balances owed. Consumer debt reached an all-time high in 2019. It’s reported that U.S. consumer debt has reached $14.3 trillion, with an average personal debt of more than $90,000. The debts include credit cards, mortgages, and loans, including personal, car and student loans.
In addition to legitimate cell phone debt collection practices, consumers also face cell phone debt collection scams. The Federal Trade Commission (FTC) reports that so far in 2020, the FTC Consumer Sentinel Network received over 85,000 reports from consumers regarding debt collection. Of the complaints, nearly 45% of the reports related to abusive debt collection practices or fictitious debts.
The FTC joined with three other federal agencies and partners from 16 states to launch Operation Corrupt Collector. To date, the operation has brought fines and legal actions against 50 of the worst debt collection agencies, including legitimate companies and phantom (fake) collectors.
Can Debt Collectors Legally Call a Cell Phone?
Cell phone calls from debt collectors can be inconvenient, annoying, and embarrassing. Many people ask if debt collectors can legally call a person’s cell phone. The answer: Maybe.
First, a creditor or debt collector can call a cell phone if there is consent, or if the consumer has an established relationship with the creditor. Federal law includes the recent addition of the Fair Debt Collection Practices Act (FDCPA) which outlines the rules for cell phone calls. In many cases, the laws prohibit debt collection agencies from calling a cell phone number or sending text messages to collect a debt. The FDCPA applies to debt collection agencies more than the original creditor.
The FDCPA states that debt collectors cannot contact consumer debtors at an inconvenient time or in an unusual place. Those places include school or work, or during an event such as a doctor’s appointment, school function, or funeral. If you receive a call from a debt collector during those times, inform the caller that the time/place is inappropriate.
You can also remove consent from being called on a cell phone at any time. Some debt collectors call or text anyway, believing that most consumers won’t take action against the company. However, if the company continues to call, the agency must pay $500.00 per call, $1,500 per call if it ignores the lack of consent or violates the time and place restriction.
Congress also passed the Telephone Consumer Protection Act (TCPA), designed to regulate telemarketers’ practices, including how and when to contact consumers.
What Information Does the Debt Collector Have to Reveal?
First, the company must send a written “validation notice” within five days of making the initial contact. The notice must include:
- Amount of the debt
- Name of the original creditor
- How to dispute the debt
Debt Collector No-No's
Debt collectors, real or fake, cannot:
- Engage in harassment
- Make threats of harm or violence
- Make repeated calls to cause annoyance
- Make false statements
- Misrepresent the amount of the debt
- Lie about working for an attorney or government agency
- Threaten arrest or legal action
- Collect interest fees or additional fees that are not in your contract
- Deposit a post-dated check before the written date
How Do I Stop Debt Collection Phone Calls?
To stop debt collectors from calling you send a letter by snail mail revoking consent to be called by the company. If you receive a call, explain to the caller that consent was revoked and hang up. If the company continues to violate the request, you may contact a consumer lawyer to claim damages.
Red Flags Associated With Cell Phone Debt Collection Scams
In addition to legitimate cell phone debt collection practices, consumers also face debt collection scams. Warning signs of a debt collection scam include the following:
1. Aggressive behavior
Legitimate debt collection companies rarely engage in aggressive behavior, including threats. They don’t require sensitive personal information, send spam emails or texts, or use spoofed phone numbers. Nor do they offer loans to cover the debt owed.
2. Offering loans
A high percentage of consumer debt involves student loans and credit cards. A real debt collector will not offer to give a loan or promise debt relief without payment. Don’t fall for a sales pitch that involves filling out a loan application.
3. False legal assistance
Debt collection companies often affiliate themselves with law firms or pretend to represent a law firm. They may offer “free” legal advice regarding your debt. Suspect all claims from these sources, even if they seem on the up and up. If you need legal advice, contact a consumer lawyer that will offer a free consultation on debt collection or debt resolution.
4. Charging up-front fees
Companies that charge up-front fees are typically scams. Double-check any information you receive against current laws and statutes. The government has modified loan repayment during the Coronavirus/COVID-19 crisis, so brush up on your rights.
Protect Yourself From Cell Phone Debt Collection Scams
If you receive any unsolicited calls from a suspected scammer, hang up immediately.
You should also:
- Check to see if the company exists by contacting your state’s Office of the Attorney General. Verify the company's legitimacy using CallerSmart's phone number identifier app and call back to check if the company was the one that actually contacted you.
- If a fake debt collection agency or a legitimate collection agency breaking the FDCPA rules contacts you, report the incident immediately to the Federal Trade Commission and your state's Office of the Attorney General. You can visit the Consumer Financial Protection Bureau for information on law enforcement and compensation for injured consumers.
- Check your credit score regularly for suspicious activity. While there are blanket credit reporting agencies, it’s also a good idea to check each credit report individually to ensure all information is correct. Check your contact information with the agencies to prevent identity theft. Do the same with your bank accounts and credit cards.
- To protect others from falling for these illegal calls and texts, you can use our reverse call identification app and leave your feedback on the number with CallerSmart's app. If you don't have an iPhone, you can run a reverse phone number lookup on our website. Be sure to leave your feedback to help others.
What To Do If You've Been Scammed
Document all communications and report all scams and attempted scams to the FTC's Complaint Assistant. Warn others about loan scams by reporting the number using CallerSmart's free caller ID app for iPhone. If you don't have an iPhone, you can still search for unknown phone numbers with our online phone book available on our website.