When it comes to debt collectors, know your rights

FOUR MORE DOWN, so many more to go.

The Federal Trade Commission recently smacked down four debt-collection outfits and their affiliates that the agency said engaged in abusive practices.

This latest round of action is part of a federal, state, and local effort around the country to target deceptive debt collectors.

I've personally been on the other end of a telephone call with a collector trying to bully me into paying a debt I didn't owe. The person was attempting to collect some medical payment that he claimed was owed by my deceased brother.

As I recall, he first tried to make me feel guilty, arguing it was my moral obligation to pay for my brother's debts. When I didn't fall for that ploy, he became belligerent. I hadn't cosigned on any debt for my brother, so I knew I was under no obligation to pay.

The shame of it is that many people would feel guilty or think they were obligated and would fall for something like this. Here are some of the tactics the companies involved in the recent FTC cases were alleged to have used:

* One collection operation, doing business under a number of names, demanded payment from consumers for payday loans and other debts even though the companies couldn't prove that the people owed the money. Employees even pretended to be law enforcement officials, according to the FTC. The agency said the ill-gotten gains in this case came to $4 million.

* Another group of affiliated companies also had debt collectors impersonate law enforcement and threatened to arrest people. Employees also pretended to be "process servers" and told folks they would be sued and their wages garnished. The companies have agreed to a federal court order that bans them from debt-collection activities and imposes a judgment of $2.2 million, which the court said represents the companies' debt-collection revenue.

* Another company sent people letters or postcards that were designed to look as if they had come from a municipal court. The correspondence contained intimidating language such as "Warrant for Your Arrest," "Final Notice Before Arrest" and "Pay Your Fine Now - Avoid Going to Jail." Other recipients were told that their vehicles could be impounded, or that they wouldn't be able to renew their driver's license. An order imposed a nearly $200,000 judgment, but it was suspended due to an inability to pay.

* A separate debt-collection outfit tried to collect payday loans that weren't owed. People working for this company were prolific in their pretending, according to the FTC. They claimed to be affiliated with a law firm, with a government-fraud task force, and with other federal and state agencies. The collectors had gotten access to information about people who had merely inquired online about payday loans. The company was found to have violated federal law by telling consumers' family members, employers and coworkers about the purported debt. Debt collectors can try to locate you, but generally they are not allowed to discuss your debts with other people.

People working for the company used profanity and didn't provide information in writing about the debt, according to the FTC.

In all, this debt collector was ordered to pay more than $4.4 million for using deception and threats to collect on the phantom payday loans.

Under the settlements to which they all agreed, the four companies neither admit to nor deny any of the allegations, a spokesman for the FTC said. These cases bring to 130 the number of actions the FTC has taken over the past year in an enforcement initiative called "Operation Collection Protection."

Even if you owe money, you have rights under the Fair Debt Collection Practices Act. You have a right not to be lied to or abused. The debt collector has to tell you how much you owe and the name of the creditor. You also have a right to dispute the debt. Find out more information about your rights at consumer.ftc.gov.

To help inform consumers, the FTC is releasing a series of videos with personal testimonies of people's encounters with fraud. The first video, "Fraud Affects Every Community: Debt Collection," can be found at ftc.gov. It features Bryan Noyes, a veteran from Maine, who got help in fighting a collection action over a debt he didn't owe. The next video will feature government impostors and will be in Spanish with subtitles.

Definitely don't ignore a debt-collection action, but don't let anyone intimidate you either.