Time-barred Debts

Some debts may be too old for a debt collector to make you pay, according to an article by Cristina Miranda, Consumer Education Specialist at the Federal Trade Commission.

Debt collectors can contact you about time-barred debts at any time. If you get a call from a debt collector, they might come right out and say they can’t take you to court to make you pay a time-barred debt. If a debt collector doesn’t tell you this, ask for the date when you made your most recent payment. Then, ask for a validation notice – a legally required letter detailing the amount owed, and the creditor name. Once you receive the notice, send a letter back within 30 days explaining that you are ‘disputing’ the debt and that you want to ‘verify’ it. Debt collectors must stop trying to collect until they give you verification.

To find out what to do if you are sued, and if you have to pay the debt, read the entire article.

This video from the FTC provides additional information:  Dealing with Debt Collectors

If you are sued over a time-barred debt (or any debt), don’t ignore it. The Lawyer Referral Service will connect you with an attorney who can assist you with defending your debt collection rights.  Call 603-229-0002 or request a referral online.

Consumer Protection Overview

No Credit Needed signNew Hampshire’s primary consumer protection law, “Regulation of Business Practices for Consumer Protection,” is commonly known as the Consumer Protection Act (RSA 358-A).   The New Hampshire Consumer Protection Act prohibits the use of any unfair or deceptive act or practice or any unfair method of competition in trade or commerce in New Hampshire. The state law specifically identifies the following practices as unfair or deceptive:

  • Claiming that goods are new or original when they are used, secondhand, deteriorated, reconditioned or altered.
  • Claiming that goods or services have certain characteristics, ingredients, uses, benefits or qualities, or certain sponsorship or approval when they really do not have such, or that a person has a certain sponsorship, approval, status, affiliation or connection that he or she really does not have.
  • Falsifying the place of origin of goods or services.
  • Passing off goods or services as someone else’s.
  • Disparaging another business’ goods or services by false or misleading statements.
  • Advertising goods or services with the intent not to sell them as advertised or failing to have a reasonable supply of goods or services provided on hand (unless the advertisement specifically says that quantities are limited).
  • Making false or misleading statements about the existence of, reasons for, or amount of price reductions.
  • Conducting “going out of business sales” which last more than 60 days or which are held more than once every two years by the same owners of the business.
  • Selling gift certificates for $100.00 or less that have expiration dates. (This does not apply to gift certificates or coupons that are given away.)
  • Dormancy fees, latency fees, or any other administrative fees or service charges that have the effect of reducing the total amount for which the holder may redeem a gift certificate are prohibited. (Does not apply to season passes.)

The above list provides examples of deceptive acts and is not an exhaustive list. In addition, some entities are “exempt” from the jurisdiction of the state court regarding consumer protection statutes violations so complaints must be filed with the entities regulating agency. For example, mortgage servicers are regulated by the NH Banking Department, so any complaint against a mortgage servicer regarding violation of NH Consumer Protection statute must be filed with the NH Banking Department.

How to file a Complaint in NH Courts

If you feel a business has violated the Consumer Protection Act, you may file a lawsuit seeking damages in NH state courts. If the court finds a violation, you may be entitled to an award for actual damages, statutory damages of $1,000 and payment of your attorney’s fees. If the court finds a violation was willful, you may be entitled to double or treble damages.

How to file a Complaint with Attorney General’s Office

Alternatively, or in addition to a state court complaint, you may file a complaint with the Attorney General’s office. Complaints are read and reviewed in the order in which they are received by the Consumer Protection and Antitrust Bureau. The bureau responds to complaints as quickly as possible. Information about how to file a complaint and the complaint review process can be found here.  If the bureau initiates an action against the business, it initiates the investigation and complaint on its own behalf and not as your attorney.

Additional Information

The New Hampshire Attorney General’s office provides a Consumer Sourcebook as a comprehensive guide with useful links to the following:

  • General information about the laws that apply to a variety of consumer transactions.
  • Examples of how the law might apply to a situation.
  • Points to keep in mind if you find yourself in a variety of circumstances.
  • Ideas for where to turn for more help.

NH Debt Collection Law

Debt collection practices in New Hampshire are governed by both state statute and federal law: The New Hampshire’s Unfair, Deceptive or Unreasonable Collection Practices Act (RSA 358-C); and the federal Fair Debt Collection Practices Act (15 U.S.C. § 1692-1695.)

Both are designed to instruct debt collectors as well as consumers as to the limits of collection practices, while protecting consumers from abusive debt collection practices. The laws are also in place to provide consumers an avenue for recourse in disputing a claim.

Both the state statute and federal act provide illustrative examples, and expressly allow consumers to sue debt collectors for violations of pertinent statutory provisions.

Under the FDCPA, a debt collector must always:

  • Identify themselves and notify the consumer that any information obtained will be used to effect collection of the debt.
  • Give the name and address of the original creditor
  • Notify the consumer of their right to dispute the debt
  • Provide verification of the debt within 30 days of request

If you believe your rights have been violated under any of these laws, consulting with an attorney who regularly handles Consumer Protection cases can make all the difference.  The Lawyer Referral Service of the New Hampshire Bar Association can refer you to the right one, at no cost to you.  Call 603-229-0002 or submit an online request form.

Photo credit Flickr Creative Commonsfrankieleon

Debt Collectors Profiting From Student Loan Crisis

John Hechinger, writer for Bloomberg Businessweek reported on March 26, 2012:

With $67 billion of student loans in default, the Education Department is turning to an army of private debt-collection companies to put the squeeze on borrowers. Working on commissions that totaled about $1 billion last year, these government contractors face growing complaints that they are violating federal laws by insisting on stiff payments, even when borrowers’ incomes make them eligible for leniency.

Education Department contracts — featuring commissions of as much as 20 percent of recoveries — encourage collectors to insist on high payments. Former debt collectors said they worked in a “boiler-room” environment, where they could earn bonuses of thousands of dollars a month, restaurant gift cards and even trips to foreign resorts if they collected enough from borrowers.

The article goes on to describe the specific federal laws that debt collectors must abide by.

Federal-aid law requires collectors to offer “reasonable and affordable” payments, so debtors can “rehabilitate” their loans, repairing their credit and making good on what they owe taxpayers.

The law mandates no minimum payment for a borrower to enter a rehabilitation program, and collection companies may take borrowers’ finances into account. The fair debt act forbids collectors from making “any false, deceptive or misleading representation.”

Insisting that cash-strapped borrowers make minimum payments and then failing to disclose lower-cost options violates both federal-aid and fair debt-collection laws, according to Deanne Loonin, an attorney with the Boston-based National Consumer Law Center.

Read the entire story.

If you are struggling with your student loan debt, check out the National Consumer Law Center’s  Student Loan Borrower Assistance website.

Some student loan issues may need legal intervention.  The Lawyer Referral Service of the NH Bar Association can refer you to an attorney who handles student loan and/or debt collection issues.  Call 603-229-0002 or request and online referral.