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New rules seek to curb creditor harassment

The Fair Debt Collection Practices Act (FDCPA) was established in 1978, however, it has not been amended to meet the needs of modern consumers. Now the Massachusetts attorney general is paving the way towards amendments that may benefit debtors in Tennessee and nationwide.

Attorney General Coakly has proposed revised regulations that the debt-collection industry has deemed "unreasonable." One of these amendments bars the practice of threatening to sue a consumer for an old debt that they know is beyond the statute of limitations. The new rules would also prohibit any collection activity on time-barred debt without explaining in clear language that the collector can no longer sue to collect it.

Debt collectors have used unfair tactics such as threatening jail time, lawsuits and arrest, even without the authority to pursue any of these ends. New regulations would stop these kinds of threats and limit calls and text messages to two per week. The rules would also require that creditors and third-party buyers must be able to prove and verify that debt is valid. This is a setback for creditors who used computer files with phone numbers and payment amounts without actually checking to determine if debts were valid.

The amendments aim to meet the needs of modern consumers and the advances made in technology. The goal is to level the playing field for creditors and consumers. According to consumer advocates, regulations are necessary and should be effective. For those who are facing overwhelming debt and who suffer creditor harassment, new legislation could limit unfair collection practices and give debtors an opportunity to take legal action against their creditors.

Source: Huffington Post, "Bad News for Most Debt Collectors, and Good News for Consumers," Bill Bartman, May 8, 2012.

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