The Fair Debt Collection Practices Act (FDCPA) dictates how loan agents and debt collectors can conduct business. FDCPA applies generally to "debt collectors" who directly or indirectly collect or attempt to collect debts owed. Lenders who work with third party debt collection agencies should make sure they comply with FDCPA. Understanding how lenders and their vendors can legally operate may help keep you from being the victim of a scam. Below are some illegal and questionable behaviors which may indicate a scam:
- Calls or emails soliciting your personal and financial information.
- Notification that you have been pre-approved for a loan without you having applied for one.
- Being asked to send a ‘good faith’ deposit or pay a ‘processing fee’ to secure a loan.
- The use of scare tactics, abuse, threats, deception, or unfair practices to collect debts.
- Being threatened with prosecution or jail time for debts, either real debts or debts a person doesn’t owe.
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