Can A Debt Collector Threaten Me With Criminal Charges Or Imprisonment?

Under 15 U.S.C. Section 1692e, it’s illegal for a debt collector to make “false or misleading representations.” While there are numerous types of false or misleading representations that violate the law, two pertain to criminal accusations and threats of imprisonment:

Section 1692e(4): “The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.”

Section 1692e(7): “The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.”

Can a Debt Collector Threaten to Send Me To Jail?

Under the Fair Debt Collection Practices Act (FDCPA), a debt collector can’t threaten you with jail or imply that not paying your debt will lead to a jail sentence. This section of the law (15 U.S.C. Section 1692e(4)) is intended to protect consumers from being frightened into paying a debt.

There are two tactics that debt collectors might use that violate this provision of the FDCPA. The first is when they tell a consumer that they will be arrested if they don’t pay their debt. In Turner v. Oxford Management Services, for example, the debt collection agency allegedly threatened the plaintiff with jail and loss of custody of her children if she didn’t pay a debt. In another case, In re McLaughlin (No. 07-04375, 2007 WL 3229166 (Bankr. D. Ariz. Oct. 30, 2007)), a couple that was protected from receiving debt collection calls because they had filed for bankruptcy still received calls from a debt collector threatening to file criminal charges and send police to their home to have the husband arrested.

Can a Debt Collector Threaten to Seize My Car or Property?

The second tactic that violates Section 1692e(4) is threatening to seize property that debt collectors aren’t legally allowed to seize.

If you have secured a debt with collateral, then the company to whom you owe the debt can seize your property. Two common examples of this are car loans, in which the car is used as collateral for the loan, and mortgages, in which the home is used as collateral for the mortgage. If a car loan isn’t repaid, the company that owns the loan can repossess the car. Similarly, if mortgage payments aren’t made, then the lender can foreclose on the mortgage and take possession of the house. But a debt collector can’t threaten to take your house if you don’t pay your phone bill.

Renteria v. Nationwide Credit (U.S. District Court, Southern District of California, No. 09cv1195 BTM(JMA)) provides an example. The plaintiff claimed that, in attempting to collect an ordinary debt, Nationwide Credit threatened to take his home – an action that they weren’t legally allowed to take.

Can a Debt Collector Suggest that I Committed a Crime?

A debt collector isn’t allowed to imply that you’re dishonest or a criminal. Section 1692e(7) of the FDCPA protects you from being shamed by a debt collector or subjected to criminal accusations. Examples of tactics used by debt collectors that violate this part of the law include:

• Falsely accusing you of fraud
• Blaming you for disregarding good business practices
• Telling you that you’re hoping the bill will disappear and that the debt collector will never let you forget the debt
• Criticizing you for being dishonest

In McMillan v. Collection Professionals (Seventh Circuit Court of Appeals 455 F.3d 754), the plaintiff accused the debt collection agency of violating this section when it tried to collect on a bounced check. The letter sent by the debt collection agency said, in part, “You are either honest or dishonest you cannot be both,” and, “The injustice of permitting this account to become past due and then ignoring all requests for payment, casts a doubt of good intentions. We would like to give you this final opportunity to prove your honesty and good intentions.”

The plaintiff argued that there are many reasons why a check might bounce that don’t involve a lack of honesty, including mathematical error, bank error, or the unexpected delay in the clearing of funds to cover the check.

In overturning the lower court’s decision, the appellate court cited the legislative history of the FDCPA, which reveals that Congress knew that indebted consumers are most often victims of circumstance:

“One of the most frequent fallacies concerning debt collection legislation is the contention that the primary beneficiaries are ‘deadbeats.’ In fact, however, there is universal agreement among scholars, law enforcement officials, and even debt collectors that the number of persons who willfully refuse to pay just debts is minuscule․ [T]he vast majority of consumers who obtain credit fully intend to repay their debts.   When default occurs, it is nearly always due to an unforeseen event such as unemployment, overextension, serious illness, or marital difficulties or divorce.”

Threatened by Debt Collectors? Turn the Tables and Recover Money

If a debt collector has implied that you can go to jail for unpaid debts or questioned your integrity, you can turn the tables and sue them for unfair debt collection practices. If a court finds that the debt collector has violated the FDCPA, you can recover up to $1,000, plus court costs and attorney fees. Get the justice you deserve without paying a dime. Lemberg Law can help.

Lemberg Law attorneys protect consumers from abusive debt collection agencies. If you are receiving unwanted collection calls at work, then you could have a case against the collection agency. Contact Lemberg Law at 844-685-9200 ☎ or complete our online form for a no-cost, no-obligation consultation.