The Fair Debt Collection Practices Act requires creditors to adhere to certain guidelines when it comes to collecting consumer debts. Unfortunately, as many New Jersey residents have experienced, not all companies follow these guidelines when dealing with consumers. When it is discovered that debt collectors are using unscrupulous tactics to collect debts, certain agencies within the federal government often step in to stop harassing phone calls from creditors.
Recently, the Consumer Financial Protection Bureau and the Federal Trade Commission announced the settlement of claims against Green Tree Servicing LLC, a company accused of using abusive and illegal tactics in its attempts to collect debts. The company allegedly failed to honor agreements between consumers and former loan services that modified their loans. Further, it was claimed that the company was not exactly truthful about the amounts consumers owed.
The company agreed to stop the alleged practices. The settlement also requires Green Tree to pay back an estimated $48 million to customers and to pay a fine in the amount of $15 million for a total of approximately $63 million. Another aspect of the settlement requires the company to create a plan to help an unidentified number of distressed homeowners.
This settlement will help a large number of people, but not everyone in New Jersey facing overwhelming debt is a victim of unsavory tactics by debt collectors. Even so, it may be possible to stop harassing phone calls from creditors by filing for bankruptcy. Once filed, all debt collection actions must stop while the bankruptcy is ongoing. Moreover, the petitioner may receive the opportunity to start over financially — permanently putting an end to dealing with unhappy creditors.
Source: Fox Business, “Feds announce Green Tree Servicing to pay $63M to settle loan, debt collection allegations“, April 21, 2015