Georgia and Abusive Debt Collector Agree to $4.3 Million Settlement

Although creditors are allowed to take certain steps to collect on a debt, there are limits to what they can do. There are both federal and state laws designed to protect people in Georgia from aggressive debt collection practices. As one company recently found out, the price of breaking those laws can be expensive.

Collection Company Broke Both Federal and State Laws

Late last year, Nelson, Hirsch & Associates, a debt collection company that pursued debt that had been written off by original creditors, sometimes known as “zombie debt”, signed an agreement with the Governor’s Office of Consumer Protection (OCP) agreeing to shut down operations in Georgia and abstain from any debt collection within the state for a period of five years. The settlement is the latest in the state’s efforts to stop creditor harassment.

The OCP’s investigation into the company found frequent and flagrant violations of both the federal Fair Debt Collection Practices Act (FDCPA) as well as the Georgia Fair Business Practices Act (GFBPA). These violations included:

• Threatening to arrest people, charge them with fraud and put them in jail for failing to pay their debt.
• Threatening to call employers to have their wages garnished
• Threatening the family members of the person owing the debt
• Not disclosing that they were debt collectors attempting to collect a debt
• Denying people’s requests to send proof of the debt that was owed
• Collecting more than what was owed or authorized
• Making misrepresentations to people that the collector was associated with a law firm or that callers were actually fraud investigators
• Repeatedly calling people after the people requested that they stop
• Continuously calling people up to 50 times a day
• Calling people at unreasonable hours (before 8:00 am or after 9:00 pm)
• Calling individuals at work despite being told that the individuals were not permitted to receive calls at work
• Using abusive or harassing language when communicating with people

Any of these practices, whether they are done individually or collectively are illegal.

Settlement Exceeds $4.3 Million

The OCP wants to make it clear that it is not okay to threaten any individual who owes a debt. As part of its stipulated agreement, Nelson, Hirsch and Associates had to agree to stop pursuing 5,809 collection accounts, whose value was believed to be $4,307,658. In addition, the company had to pay OCP $24,000 to reimburse it for its legal and investigative costs and had to pay a civil penalty of $26,000.

In a written press release, the OCP’s Administrator, John Sours, said, “We are sending a strong and clear message that this kind of abuse and harassment of consumers, and the egregious disregard for the law that these practices typify will not be tolerated.”

Options for Stopping Collection Calls

Calls from creditors are stressful. One of the hardest things about them is that it is difficult to know what they can do and what they can’t do. Even when debt collectors aren’t breaking the law, a call from them can be very scary. Opening the mail can be just as bad. Creditors often use letters to communicate that a lawsuit is just around the corner.

Many people find it helpful to speak with a Gainesville consumer bankruptcy attorney to review their options. Both Chapter 7 and Chapter 13 bankruptcies are an effective means of stopping collection calls. Each type of bankruptcy has unique advantages. Whether a person needs a fresh start or simply some breathing room to get their affairs in order, bankruptcy offers solid protection for individuals wrestling with debt.

Unlike debt settlement or consolidation companies, bankruptcy has a feature that will provide an immediate stop to debt collection companies, the automatic stay. The automatic stay in bankruptcy is an injunction that goes into effect as soon as people file their Chapter 7 or Chapter 13 bankruptcy. The automatic stay blocks collection agencies from calling you or sending you any letters. It is the most powerful tool available for relieving the stress caused by debt collectors.

Bankruptcy is a process. A Georgia bankruptcy attorney will not only help you determine the best bankruptcy for you, but will also guide you through the process, giving you tools to avoid creditor calls. If you are tired of debt collectors and looking for relief, you should speak with an experienced bankruptcy lawyer as soon as possible to discuss the solutions available to you.