Can a Debt Collector Threaten You?

What Does the Law Say About Debt Collector Threats?

Under the Fair Debt Collection Practices Act (FDCPA), Section 1692e, debt collectors are banned from using false, deceptive, or misleading statements to pressure you into paying. That includes threats of legal action, credit reporting, criminal prosecution, and more.

Two key sections are especially important:

• Section 1692e(5): Prohibits threats to take action that cannot legally be taken or is not actually intended.¹
• Section 1692e(6): Prohibits false claims that a transfer of the debt will result in harsher treatment or loss of legal rights.²

Can a Debt Collector Threaten to Sue Me?

Only if they are legally allowed to sue and actually plan to follow through.

Many debt collectors threaten lawsuits to scare consumers, even when:

• The debt is past the statute of limitations and legally unenforceable.
• They do not have legal authority to sue in your state.
• Their contract with the creditor does not allow them to take legal action.
• They do not regularly file lawsuits and have no intent to do so.
• If a collector threatens a lawsuit under these circumstances, they are likely violating the FDCPA.

Red flags that a threat may be empty include:

• The amount owed is relatively small.
• You have formally disputed the debt.
• The collector is located far from the proper court jurisdiction.
• The agency does not have a history of suing consumers.

Can a Debt Collector Threaten to Report Me to a Credit Bureau?

Only if they are legally able to report the debt and actually plan to do so.

In Gonzales v. Arrow Financial Services, a debt collector sent a letter referencing possible credit reporting.³ The letter used the word “if,” but the agency was not legally allowed to report the debt. The court ruled that even a technically true statement can still be misleading. In that case, the court found the letter to be an implied and unlawful threat.

Similarly, in Ruth v. Triumph Partnerships, a debt buyer sent a privacy notice stating they may share consumer information with marketers and financial companies unless the consumer opted out.³ The court ruled this was a threat to take illegal action and violated the FDCPA.

What Other Threats Are Illegal?

Debt collectors are not allowed to:

• Threaten criminal prosecution for unpaid debt
• Threaten to seize assets unless they have obtained a legal judgment
• Threaten to report canceled debt to the IRS unless legally required and authorized
• Threaten to contact your employer, if doing so violates other parts of the FDCPA
• Threaten to take actions prohibited by other laws, such as the Bankruptcy Code, Fair Credit Reporting Act, or Servicemembers Civil Relief Act

Can a Debt Collector Threaten to Transfer My Debt?

No. A collector cannot make false or misleading threats to transfer your debt to someone else who will treat you more harshly.

Section 1692e(6) specifically prohibits false representations that transferring your account will:

• Cause you to lose legal defenses
• Result in more aggressive collection tactics
• Put you at risk for actions the collector cannot legally take

For example, a collector cannot threaten to send your file to an attorney or repossession agency unless they genuinely intend to and are allowed to do so.

What Can You Do if a Collector Threatens You?

If you have been threatened with:

• A lawsuit
• Credit bureau reporting
• Arrest or criminal charges
• Asset seizure
• IRS involvement
• Harsher treatment after transfer

…the collector may have violated federal law. You may be entitled to:

• Up to $1,000 in statutory damages
• Reimbursement of court costs and attorney’s fees
• Actual damages, if you suffered financial or emotional harm

Turn the Tables and Recover Money for Debt Collector Threats

At Lemberg Law, we fight for consumers who are being harassed or threatened by debt collectors. If you received illegal threats, you do not have to handle it alone.

Contact us at 844-685-9200 or fill out our form for a free, no-obligation consultation. You pay nothing unless we win.

Let us help you hold abusive collectors accountable and protect your rights.