U.S. Senator Charles E. Schumer (D-NY) has urged a federal investigation to look “into debt collection companies that pursue payments from relatives of deceased debtors, saying the practice appears to violate existing law.” Schumer argues that debt collectors who harass a deceased person’s family members should be required to state they (the family members) have no obligation to pay the debt unless they were a co-signer.
Senator Schumer wrote a letter to Chairman Leibowitz where he discusses why he feels this tactic is wrong should not be allowed to continue:
“To say the least, this practice is distasteful and unethical. Moreover, this practice may very well violate the Fair Debt Collection Practices Act. I am hereby requesting that the Federal Trade Commission investigate whether debt collection companies are violating the law when they engage in this practice, and exactly what information they are conveying to surviving relatives who are under no obligation to pay off their loved ones’ credit cards.”
In the letter he also reminds that the Fair Debt Collection Practices Act prohibits debt collectors from contacting friends or relatives of the person in debt. Schumer feels ignoring that becomes much more inappropriate during a time of grieving.
“I find it shocking that a debt collection company would determine that it is worth causing profound anguish and embarrassment in order to collect debts that are sometimes as low as $50, or which result in a payment of $15 a month from a widow or widower who is struggling to make ends meet. If a debt is large enough to be worth collecting, there are legal ways to obtain payment.”
Schumer calls for an investigation into the following:
“Which debt collection companies (“collectors”) are engaging in the practice of collecting credit card debt from widows, widowers, children, and other relatives of the deceased?”
“Which credit card issuers are hiring these collectors, or selling their debts to these collectors? Have the issuers endorsed this practice, either by turning a blind eye toward it or by specifically encouraging it?”
“Does the practice of trying to collect unsecured debts from the living relatives of debtors who have passed on violate the Fair Debt Collection Practices Act’s prohibition on communicating with third parties? If not, why not? What measures could be taken to make sure that these practices are stopped?”
“If these practices are currently legal, are these collectors uniformly making sure that they tell living relatives that they have no legal obligation to pay the debt? Further, are the collectors informing the living relatives of the statute of limitations for collecting these debts? Are the collectors informing the living relatives that any credit card debt would be paid from the estate only after other secured debts, such as mortgage and car payments, are paid?”
If you have been contacted by a debt collector following the loss of a loved one and have questions, feel free to contact us.
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