We have posted some new and updated Debt Collection Letters to help you with different collection agency situations that may arise.

Debt Validation Letter
This letter will help you validate a debt if you aren’t sure you owe the debt, aren’t sure the amount is correct or think the statute of limitations may have expired on your debt.

Cease and Desist Collections Letter
This letter will help when you want a 3rd party collection agency to stop calling you and/or your references and family members.

Wage Assignment
Payday Lenders use wage assignment often, and I am pretty sure they are the only ones still using it. The reason is that the FTC has declared this practice virtually illegal and only shady online payday loan companies are still using this tactic to collect on debt.

Wage Garnishment
A court ordered Wage Garnishment cannot be stopped. This letter will do nothing for that situation unfortunately and you should contact a lawyer.

Payday Lenders claim to garnish wages often, but they are most often just referring to a wage assignment (see above). So, we refer you again to the wage assignment letter.

I hope you enjoy and use these letters to stop harassing debt collectors and as always, if you have any questions please Ask Brent.

Texas AG Greg Abbott

Texas Attorney General Greg Abbott has charged an Oklahoma based payday loan company with impersonating a state official. Patrick D. “Dylan” White, whose businesses operate in Texas as CASHMAX, Fed Cash, TOPCASH and Cash Service Center, is owner of Federal Cash Advance of Oklahoma, LLC, and maintains offices in Dallas County.

According to State investigators, the defendant sent deceptive collection letters to Texans with outstanding payday loan debts. The letters were delivered in envelopes that contained the Dallas County Clerk’s forged signature and improperly bore the official seals of both the State of Texas and Dallas County. Inside the envelopes, the defendant inserted notices of debt collection that instructed recipients to call a telephone number, which belonged to Federal Cash Advance’s CASHMAX offices.

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Washington Governor Gregoire

Washington State Governor Gregoire signed a new law today that restricts check cashers’ and payday lenders’ ability to collect on consumer debts. Payday Loans have gotten a lot of attention in the Washington Legislature this month, but this bill is very interesting in its definition of “harassment.”

This bill has some relatively benign elements, such as making it illegal for payday loan companies to impersonate a police officer and make false threats to consumers. I’m pretty sure these are already illegal activities in all 50 states, right?

Yet, this bill also bans the so-called “field calls” frequently used by payday loan collectors. Employees of payday loan companies often take off into “the field,” showing up at consumers homes or places of work, usually delivering a letter that notifies them of their payday loan debt. This is the definition of harassment, since the same payday companies have already called 2-3 times per day to remind the customer that they have fallen behind on their payday loan. It is good to see this horrible collection tactic put out of commission in Washington, at least for payday loan collectors.

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While the IRS has stopped working with private collectors, many local District Attorney’s offices have not. A company called American Corrective Counseling Services provides for-profit services to local District Attorney’s offices, including Los Angeles County. The company sends out letters on District Attorney’s letterhead threatening prosecution and jail time for writing bad checks, even though there is little chance that the District Attorney’s will ever follow through with any action. They also charge hundreds of dollars in fees and share a portion of them with the DA’s offices they contract with.

Now if a private debt collector makes threats that they do not intend to or have the means to follow through on, they are in violation of the Fair Debt Collections Practices Act or FDCPA and can pay hefty fines. However, apparently those rules don’t apply to District Attorney’s and ACCS, since they joined together to convince House Rep. Barney Frank to support exempting them from FDCPA in 2006.

This certainly seems like a double standard and could really be an issue with loans secured by a check, namely payday loans. DA’s and ACCS could be inadvertently helping payday loan collectors falsely threaten prosecution against consumers who simply defaulted on a high interest, unsecured loan.