When a debt collector harasses and threatens you, it can be downright distressing – and illegal.

The FTC announced a complaint and settlement with American Municipal Services Corporation (AMS), which collects debts for cities and towns. The FTC alleges AMS made false threats and misrepresentations to get people to pay, and under the terms of the settlement, they’ll have to stop. The FTC says AMS threatened people would be arrested, have their driver’s licenses suspended, have their vehicles impounded, and have their debts reported to credit bureaus. Using names like “Warrant Enforcement Division,” AMS made people think these letters came directly from government authorities, according to the FTC.

But the FTC says AMS broke the law when collecting those debts. AMS had no power to jail people, nor did they actually know whether municipalities really intended to do so. In addition to stopping these deceptive and illegal acts, the order requires AMS to give up collection fees obtained using these tactics. 

Under federal law, debt collectors cannot:

  • falsely claim to be law enforcement officers
  • falsely claim you’ll be arrested if you don’t pay
  • threaten to seize, garnish, attach, or sell your assets — unless they legally can and intend to do so
  • give false credit information about you to anyone, including a credit reporting company
  • use a fake company name

If it’s a personal or household debt, it’s illegal for debt collectors to:

  • call before 8 a.m. or after 9 p.m.
  • contact you at work if you’ve told them verbally or in writing that your employer doesn’t allow such calls
  • contact a third party about you for any reason other than getting your contact information
  • harass you or anyone else they contact about you

Learn more about your rights when facing debt collection.

 

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