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FTC fines debt collection agency for creditor harassment

Arizona residents struggling with debt may be all too familiar with creditor harassment tactics. If the mounting bills were not problematic enough, the ceaseless phone calls threatening legal action add to the stress many debtors feel. And many debtors are not aware that there are certain behaviors a creditor cannot engage in, as they would amount to unfair practices for which they could be held accountable.

With the permeation of technology into almost every facet of many Arizona residents' lives, it may not come as a surprise that debt collection agencies have also taken to texting debtors relentless and demanding payments. Following the trend, in the first ever case related to illegal text messages, the Federal Trade Commission reached a settlement with a debt collection company for their use of aggressive tactics through text messages.

The text messages were sent to more than a million phones, threatening lawsuits, police presence at residential homes, wage garnishment and even imprisonment if debts were not settled. It has also been claimed that friends, co-workers and family members were contacted through various means, alleging the debtor had committed fraud, a tactic that is explicitly forbidden under federal law.

Under federal law, debtors are protected from being embarrassed publicly. It is illegal to send mail indicating someone owes debt or endanger their job, relationship or reputation.

With more instances of debt collection agencies crossing the line and engaging in aggressive illegal behavior, debtors may not be aware that they have any recourse in law. However, not only can they file a complaint on the national consumer complaint database maintained by the FTC, they can also put an end to most of their debt through federally guaranteed protections, in the form of personal bankruptcy.Bankruptcy not only wipes out most bills, but also immediately puts an end to creditor harassment and wage garnishment, so Arizona residents can rebuild their life without external pressures.

Source: Huffington Post, "Debt collectors using terrible new tactic get fined $1 million," Chris Kirkham, Sept. 26, 2013