In September, 2010, the Attorney General of the State of New York announced that the investigation into the Buffalo, New York, debt collection industry has netted some pretty slimy catch: debt collectors aiming at our military families, who were unable to pay the incredibly high fees and interest rates on payday loans. The owner of one of the companies, Stephanie Lowinger, allegedly instructed his employees to threaten to contact and sometimes actually contact the commanding officers of the service members. See: http://www.consumeraffairs.com/news04/2010/09/debt-collectors-harassed-military-families.html.

Threatening to notify one’s employer or commanding officer in the case of a member of our military violates the Fair Debt Collection Practices Act, 15 U.S.C. Sec. 1692 et seq., which severely limits communications by debt collectors to third parties. My firm has prepared a number of complaints filed in Federal District Court for service members here in California, involving similar threats and calls by debt collectors.

Also, I have represented consumers who have experienced debt collectors calling and revealing personal information to neighbors, siblings, parents, employers, coworkers, and children.

If the calls are intentionally placed to third persons who are not liable on the debt, then the only sure way to terminate such illegal collection acts is with a lawyer filing a collection under the Fair Debt Collection Practices Act (FDCPA), which provides for actual damages and attorney’s fees. If it is not clear that these debt collectors intended to reveal personal information to a third person, the consumer should put the debt collector on notice of their correct address and phone number and request that all communications be directed to this correct address and phone number. Such requests are best done in writing by certified mail, with a copy of the letter and postal receipt kept at least one year, which is the statute of limitations for FDCPA claims. Please see the sample letters 1.1 and 1.2 at www.StopCollectionHarassment.com.

I have also had the honor of representing consumers who were sued on payday loans, in debt collection lawsuits. In my experience, the debt collection lawyers don’t sue for the full interest rates specified in the loan, they primarily want to get most of the principal paid back. Besides, the full interest rate would make most people blush, given how high they are and the people who agreed to them so vulnerable, financially.