About 'fair debt collection practices act notice'|Draw the Law – (Lack of) Payment Issues, Part V: Fair Debt Collection Practices Act
Have you ever filled out a credit application when you applied for a loan, automobile, credit card, or a refrigerator or stove? When you get near the bottom of the application there is always a section for you to provide two or three references. Now you are probably wondering why personal references are needed for your credit application? Some people think they probably know why the references are required. If you think that creditor is going to call your personal references and ask them if you are an outstanding citizen in the community or if you do volunteer work, well you are way off track. In fact when you fill out a credit application and you provide references no one will ever call your references. Well there is one particular instance when they will call your references and that's if you fall past due with a creditor. If you are past due on your account a creditor probably won't immediately call your references. Here is the situation that will trigger a phone call to your reference: The creditor calls your residence and the phone is disconnected and now they call your place of employment and they are told that you no longer work there. If these two situations happen they may begin calling your references. Now if they mail you a past due notice and it get returned because you have moved and now have a new address but you failed to disclose the new address to the creditor then for sure they will call your references. Creditors will call your references to see if they can get information about you from them. They are not allowed to disclose the nature of the call and especially they cannot tell them you are past due on a loan or a credit card account. (there are some that do), To disclose this information to a third party would be a violation of the Fair Debt Collection Practices Act, which is a law that governs what third party debt collectors can and cannot do during the course of their collection activities. The creditor is hoping the references will be able to help pin point your new address. Sometimes debtors have moved in with relatives. I remember years ago when I was collecting on a past due account and I called a reference and the person I was looking for answered the phone. Once a creditor gets you on the phone they will update all of your new information such as phone numbers, new employment, (if applicable), and new address. They will also try to set up some payment arrangements. This is why references are so valuable to a debt collector or a creditor because it helps to them to track you down if you skip out and decide not to pay. This process is different from an employment application. If that employer is thinking about hiring you there is a 99.9% chance that your references will be called. |
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