News & Resources

Debt collector faces serious penalties

Feb 11, 2013 Philip Burgess

The debt collection industry has come under a heightened level of scrutiny in recent years, as more agencies continue to become active and many do not have enough knowledge to properly follow the laws. As a result, enforcement of debt collection practices has become more aggressive, with various federal and state entities increasing efforts to detect and deter abusive practices.

There are a wide variety of actions debt collectors are prohibited from taking, and failure to meet the requirements of the law can lead to several issues, including fines, hurt reputations and loss of the money owed by clients. Still, some agencies are continuing to partake in common illegal activities, such as intimidation and aggression tactics.

Penalties of failing to follow guidelines
The Southeast Texas Record recently reported that a debt collector is being sued for falsely claiming an arrest warrant had been issued for a couple in Tyler, Texas. The pair, Eric and Wanda Obmann, filed the suit against the debt collection agency that is based in the Eastern District of Texas for allegedly making false claims in attempts to retrieve the money owed.

According to the news provider, the defendant allegedly misled the Obmanns from the start, stating that it was a law enforcement-related debt collection firm, when in fact it was not. The fear tactic succeeded, as the collection agency is accused of receiving the funds from Eric Obmann after the defendant said that his wife would be imprisoned should the money not be repaid immediately. 

The source explained that the collection agency allegedly called the man's mother in an effort to collect the debt, and the defendant might face penalties for this action should the jury reach a conviction. Finally, the couple is hoping to receive restitution for a variety of issues, including actual damages for emotional distress, frustration, fear, court costs, anxiety and punitive damages.

Avoiding legal issues
Businesses in need of debt collection assistance should always consider using a third-party provider of services that specializes in the associated responsibilities. Compliance with standing legal statutes is crucial to maintain a strong reputation among clients and the general population, and is even more difficult considering the current stigma facing the industry.

With a debt collection service provider, businesses can rest assured that outstanding loans will be paid back in a timely fashion, and all activities will be carried out in accordance with the law and best practices.