Can A Debt Collector Threaten Me With Reporting False Credit Information?

No. Under the Fair Debt Collection Practices Act (FDCPA), a debt collector cannot threaten to report you to credit bureaus with false information about a debt or omit to report a dispute if one has been filed. Debt collectors are subject to fines for this sort of behavior.

15 U.S.C. Section 1692e(8) of 15 U.S.C. makes it illegal for debt collectors to make “false or misleading representations” about your credit information, namely:

Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

The Consumer Financial Protection Bureau (CFPB) further clarifies how debt collectors can communicate with consumers they maintain owe money to creditors.

What Does the Law Say?

The FDCPA, which is a federal law, prohibits debt collectors from using any false, misleading, or deceptive means when they try to collect debts. The CFPB, which clarifies provisions of the FDCPA, provides some vital guidelines.

Debt collectors may not falsely imply or claim that:

  • They are attorneys or representing the government
  • They work for credit operating companies
  • Documents they send you are legitimate legal documents
  • You have committed a crime because you haven’t paid a debt
  • You will be arrested and possibly imprisoned if you don’t pay your debt
  • They are able to garnish or seize your wages, bank account, or any kind of property unless the law permits this and they state they intend to take that action

Additionally, they cannot legally:

  • Misrepresent the status of your debt or how much you owe
  • Threaten to take action that they aren’t able to take legally or don’t intend to take
  • Use or send written communications that like or falsely represent official documents from government or court agencies.
  • Use company names other than the true name of the debt collector’s company or the company that person is representing

Must a Debt Collector Tell a Credit Bureau that a Debt is Disputed?

Under the Fair Debt Collection Practices Act (FDCPA), a debt collector isn’t allowed to intimidate consumers in an attempt to get them to pay. This part of the law (15 U.S.C. Section 1692e(8)) is intended to prevent debt collectors from communicating or threatening to communicate false credit information. This clause is often violated when a debt collector communicates with a lender, creditor, or credit bureau, and fails to tell them that you’ve disputed the debt in question.

In Evans v. Portfolio Recovery Associates, the Seventh Circuit Court of Appeals (Nos. 17-1773, 17-1860, 17-1866, 17-2622, 17-2756, and 18-1374) ruled that the debt buyer violated Section 1692e(8). In those cases, combined by the court, Portfolio Recovery Associates received identical letters from a volunteer law clinic attorney that indicated that the amounts of the debts reported were inaccurate. Yet for each of the plaintiffs, the debt buyer reported the amount of the debt, the account number, and the name of the original creditor to the credit bureaus. However, Portfolio Recovery Associates didn’t inform the credit bureaus that the debts were disputed.

Reporting a disputed debt is critical, because not doing so could be extremely detrimental to the consumer. In Saunders v. Branch Banking(526 F.3d 142, 4th Cir. 2008), the court noted, “[The defendant’s] decision to report the debt but not the dispute resulted in a much lower credit score for [the plaintiff] than a report of both the debt and the dispute.”

Can a Debt Collector Spread Lies About My Credit Information?

The short answer is “no.” If a debt collector threatens you by suggesting that they’ll share inaccurate information with a third party, such as a neighbor, employer, or public assistance office, that’s against the law. It is also a violation of this section for a debt collector to threaten to tell a third party that you refuse to pay a debt, when the truth is that the debt isn’t your responsibility to pay or that you’ve disputed the debt.

Fight Back Against Debt Collectors’ False Credit Information

If a debt collector has threatened you or failed to report a disputed debt to a credit bureau, Lemberg Law can help you achieve the justice you deserve. Under the FDCPA, you are entitled to recover up to $1,000 from a lawbreaking debt collection agency, along with court costs and attorney fees.

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.

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