Can Debt Collectors Tell Other People What I Owe?
Money, finances and debt are private and personal. A good analogy would be medical information. Most people know that our medical information is protected, and that professionals in the medical field have an obligation to safeguard our privacy. The same holds true with debt, and with debt collectors.
Disclosure as Leverage
It has long been a strategy for debt collectors to use the supposed shame or embarrassment of having debt, as leverage to get a debtor to pay a debt. Threatening to tell employers, friends or family that you owe money—or actually telling them—has been a common tactic in the debt collection industry.
Sometimes, the disclosure is purposeful, and with the intent of getting you to pay. Other times it is accidental, such as when a debt collector leaves a voice message on the wrong person’s cellphone. This often happens with pre-recorded messages, that automatically leave messages for people, with no way of knowing that they are actually leaving a message with the correct person.
Law Forbids Disclosures
Either way, both federal and state law prohibits disclosing this information—even if the disclosure is completely accidental. The federal law that prohibits disclosures is called the Fair Debt Collection Practices Act (FDCPA).
Debt collectors will often “suggest” that they could tell employers or others about your debt to try and frighten you. But not only does the law forbid telling anybody about your debt, or that you owe money, but the law also forbids even threatening to do so, as it is illegal for a debt collector to threaten to do something that it does not have a right to do.
No Specific Language is Needed
To break the law, the debt collectors don’t actually even have to mention what you owe or to whom you owe money.
Simply saying purposely vague or cryptic information violates the FDCPA. For example, if a debt collector says that it has “very important business information” or “private personal information” to a third party, the debt collector potentially is in violation of the FDCPA, even though the word “debt” or other specific information was never actually used. Similarly, debt collectors have been found to break the law by mailing envelopes marked with such language on the outside, where others can potentially see them.
The debt collector breaks the law, even if no other third party actually ever sees or hears the information. If a debt collector leaves a voicemail with your mom about your financial information, even if mom doesn’t hear the message, the law has still been broken.
Communication with Vendors
The Eleventh Federal Judicial Circuit (which includes Florida) even weighed in on this area, saying that it could even be an FDCPA violation for a debt collector to transmit information about your debt to third party vendors, which are often used by debt collectors. Vendors may include investigators, companies that do background checks, or which do searches of public records.
Legitimate, legal or not, the fact is that knowing that some debt collector could, accidentally or otherwise, disclose information about your finances is concerning. Bankruptcy eliminates those concerns.