5 illegal tactics shady debt collectors love

For a lot of debt collection companies, it's hard to stay on the right side of the law. That's because consumers have protections under federal law intended to stop debt collectors from using underhanded tactics to force payments to be made.

On Thursday, two New York-based debt collection firms that allegedly abused consumers were shut down by the Federal Trade Commission and the New York Attorney General's Office.

"Today's action should make it clear that nobody is above the law, and when shady debt collectors engage in illegal and abusive business practices, they will be held accountable," New York AG Eric Schneiderman said in a statement.

The problem has gotten so bad that the FTC now publishes an ever-growing list of banned debt collectors that details what they were accused of to earn their dubious distinctions. In the past five years, the FTC filed lawsuits against 180 debt collectors and banned 63 of them, winning more than $220 million in judgments. In 2014 alone, the FTC filed charges against 56 debt collectors.

Consumers may not realize they have rights under the federal Fair Debt Collection Practices Act, a law that also allows them to file lawsuits to collect up to $1,000 from debt collectors that cross the line. In addition, consumers are urged to lodge complaints about such illegal practices with their state attorney general and the FTC.

Here are five illegal tactics used by unethical debt collectors:

1. Pretending to be someone else. Debt collectors have to identify themselves and who they work for. But a common tactic among the shadiest outfits is to pose as government employees (including the police), lawyers and others for the purpose of intimidation.

2. Making threats. It's illegal to threaten anyone to try to get them to pay a debt. It is, however, typical of many of the banned debt collectors to threaten anything from bodily harm to arrest to letting the neighbors know you have a debt.

3. Contacting third parties. A debt collector, if they know you are represented by a lawyer, can contact the lawyer regarding your debt. Otherwise, pretty much anyone else is off-limits. But debt collectors who ignore the law will contact employers, neighbors or leave messages about the debt with just about anyone they can as a tactic to force payment.

4. Calling at odd hours. Under federal law, debt collectors may call only between 8 a.m. and 9 p.m. But calling in the wee hours or late at night will certainly get your attention. And that's just what the worst debt collectors will do.

5. Harassment. Relentless calls at home and work as well as name-calling, in-person visits and the intimation that the debtor is a thief are tactics shady debt collectors use. Harassment of a person who owes money is illegal.

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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.