Many states currently have laws that make it illegal to engage in debt collection without being licensed to do so in the state. However, this does not stop debt collectors from violating these state laws and threatening to sue individuals, even though they legally cannot because they are unlicensed in the state. This is unlawful and menacing behavior. It would be easier to bring claims under the FDCPA if the act were more clear that threats to sue when a debt collector is unlicensed to collect on a debt in a state is a false, deceptive, or misleading representation. This clarity combined with stronger penalties might serve to better dissuade debt collectors from continuing to violate the law in attempts to collect on debts in state where they have no right to.
I'm not sure a registration system for debt collectors really addresses the issue. I'm not exactly sure how the registration system would operate. In MA, consumers can check online to see whether a debt collector is licensed to practice in the state, many just don't know about the website or on a more basic level don't know that the debt collector has no right to try to collect from them. Is the registration system meant to displace state laws requiring licensing of debt collectors in the individual states? I hope that's not the case since states have a strong interest in regulating debt collectors for the protection of its consumers.
LawStudentAdvocate
1
Many states currently have laws that make it illegal to engage in debt collection without being licensed to do so in the state. However, this does not stop debt collectors from violating these state laws and threatening to sue individuals, even though they legally cannot because they are unlicensed in the state. This is unlawful and menacing behavior. It would be easier to bring claims under the FDCPA if the act were more clear that threats to sue when a debt collector is unlicensed to collect on a debt in a state is a false, deceptive, or misleading representation. This clarity combined with stronger penalties might serve to better dissuade debt collectors from continuing to violate the law in attempts to collect on debts in state where they have no right to.
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LawStudentAdvocate
2
I'm not sure a registration system for debt collectors really addresses the issue. I'm not exactly sure how the registration system would operate. In MA, consumers can check online to see whether a debt collector is licensed to practice in the state, many just don't know about the website or on a more basic level don't know that the debt collector has no right to try to collect from them. Is the registration system meant to displace state laws requiring licensing of debt collectors in the individual states? I hope that's not the case since states have a strong interest in regulating debt collectors for the protection of its consumers.
View this comment in the discussion thread