Money is required for almost everything, whether it's to host a birthday party or to make a child happy with a favorite toy. However in tough financial situations, paying for everything through cash may not be possible and, as a result, many people end up making purchases with their credit card. Even if it is not purchases, sometimes unexpected healthcare costs may also affect finances of the family.
There are many options available for debt relief, and sometimes these options may allow the person to get his or her loans forgiven. However, this may not end the troubles for the debtor and the debt collection agency may make calls to the debtor or the listed referrals, after a few months or years.
This is not a good practice under law as the creditor is in violation of the debtor's rights under the Fair Debt Collection Act. In such cases, the debtor has multiple options available for relief. Under the Act, the consumer is protected from unfair and abusive collectors. It has rules that must be followed by the collectors when they communicate with a consumer in relation to the repayment of a loan.
Under the Fair Debt Collection Practices Act, the creditor cannot state to a third party that a consumer has a debt, but it can ask the third party to confirm or correct information relating to the consumer's location. If the agency identifies itself to a referral or a third party as a debt collection agency or states any information about a debt, the debtor may file a lawsuit against the debt collection agency.
If any debt collector contacts the referrals, the debtor can report this matter to the state attorney's Consumer Protection Division and the Consumer Financial Protection Bureau. Also, if the creditor contacts the person regarding a forgiven debt, the person may send copies of the tax form and tax returns which show that tax was paid on the forgiven debt. Advice of a professional who has experience in such matters may be helpful to enforce debtor protections.
Source: HeraldNet, "Can debt collector call friends and family?," Steve Bucci, June 22, 2014