Fair Debt Collection Violations in NC

​The Federal and North Carolina Fair Debt Collection Violations Statutes are very similar. In fact the NC version was modeled after the Federal version. This article will concentrate on the NC statute as suing under the NC law often prevents companies from removing your lawsuit to Federal Court, where many believe they will receive favorable treatment. Damages in NC are determined by statute and vary between $500.00 and $4,000.00 per violation in addition to actual damages and attorney fees. Some of the most common violations that occur include:

1. Threatening to have you arrested.
2. Threatening to garnish wages.
3. Threatening to disclose debts to your family or employer.
4. Using profane language.
5. Calling excessively or calling early morning or late night.
6. Leaving threatening messages on your voice-mail.
7. Calling you at work after you told the collector to stop.
8. Calling after you retain legal counsel.

​If you have experienced any of the above, you should preserve any evidence and contact a local attorney immediately. Another option is to contact the NC Attorney General to file a complaint. State law determines whether you may record phone calls you receive, but voice-mails left by debt collectors are certainly fair game. You should also write down any information such as telephone number that called you, date, time of contact, and the name of the debt collector, and the name of the particular agent, and their extension. Depending on the violation, you could receive up to $4,000.00 per violation. At the very least, violations may be useful as a counter-suit in the event you are ultimately sued by the debt collector.  

Payday lenders are often the biggest offenders as they are usually owed small amounts of money and have no intention of ever suing you, so they resort to ruthless collection tactics. Don’t let collectors intimidate you into giving them a check by phone or your credit card number. Depending on how old the debt is, that $50 payment may simply be renewing the statute of limitation. Another concern is to verify they person on the other end is actually a legitimate debt collector. Always request written verification of any debt and make sure all payments are properly applied. Finally make sure you have proof of the amount owed and any payment schedule.  

For further information see the relevant NC Debt Collection Statutes:

N.C.G.S. Chapter 75 (Article 2) Prohibited Acts by Debt Collectors. 

§ 75-50.  Definitions.
The following words and terms as used in this Article shall be construed as follows:

(1)  "Consumer" means any natural person who has incurred a debt or alleged debt for personal, family, household or agricultural purposes.

(2)  "Debt" means any obligation owed or due or alleged to be owed or due from a consumer.

(3)  "Debt collector" means any person engaging, directly or indirectly, in debt collection from a consumer except those persons subject to the provisions of Article 70, Chapter 58 of the General Statutes. (1977, c. 747, s. 4; 1989, c. 770, s. 15.) 
 
§ 75-51.  Threats and coercion.
No debt collector shall collect or attempt to collect any debt alleged to be due and owing from a consumer by means of any unfair threat, coercion, or attempt to coerce. Such unfair acts include, but are not limited to, the following:

(1)  Using or threatening to use violence or any illegal means to cause harm to the person, reputation or property of any person.

(2)  Falsely accusing or threatening to accuse any person of fraud or any crime, or of any conduct that would tend to cause disgrace, contempt or ridicule.

(3)  Making or threatening to make false accusations to another person, including any credit reporting agency, that a consumer has not paid, or has willfully refused to pay a just debt.

(4)  Threatening to sell or assign, or to refer to another for collection, the debt of the consumer with an attending representation that the result of such sale, assignment or reference would be that the consumer would lose any defense to the debt or would be subjected to harsh, vindictive, or abusive collection attempts.

(5)  Representing that nonpayment of an alleged debt may result in the arrest of any person.

(6)  Representing that nonpayment of an alleged debt may result in the seizure, garnishment, attachment, or sale of any property or wages unless such action is in fact contemplated by the debt collector and permitted by law.

(7)  Threatening to take any action not in fact taken in the usual course of business, unless it can be shown that such threatened action was actually intended to be taken in the particular case in which the threat was made.

(8)  Threatening to take any action not permitted by law. (1977, c. 747, s. 4.) 

§ 75-52.  Harassment.
No debt collector shall use any conduct, the natural consequence of which is to oppress, harass, or abuse any person in connection with the attempt to collect any debt. Such unfair acts include, but are not limited to, the following:

(1)  Using profane or obscene language, or language that would ordinarily abuse the typical hearer or reader.

(2)  Placing collect telephone calls or sending collect telegrams unless the caller fully identifies himself and the company he represents.

(3)  Causing a telephone to ring or engaging any person in telephone conversation with such frequency as to be unreasonable or to constitute a harassment to the person under the circumstances or at times known to be times other than normal waking hours of the person.

(4)  Placing telephone calls or attempting to communicate with any person, contrary to his instructions, at his place of employment, unless the debt collector does not have a telephone number where the consumer can be reached during the consumer's nonworking hours. (1977, c. 747, s. 4.) 

§ 75-53.  Unreasonable publication.
No debt collector shall unreasonably publicize information regarding a consumer's debt. Such unreasonable publication includes, but is not limited to, the following:

(1)  Any communication with any person other than the debtor or his attorney, except:

a.  With the written permission of the debtor or his attorney given after default;

b.  To persons employed by the debt collector, to a credit reporting agency, to a person or business employed to collect the debt on behalf of the creditor, or to a person who makes a legitimate request for the information;

c.  To the spouse (or one who stands in place of the spouse) of the debtor, or to the parent or guardian of the debtor if the debtor is a minor and lives in the same household with such parent;

d.  For the sole purpose of locating the debtor, if no indication of indebtedness is made;

e.  Through legal process.

(2)  Using any form of communication which ordinarily would be seen or heard by any person other than the consumer that displays or conveys any information about the alleged debt other than the name, address and phone number of the debt collector except as otherwise provided in this Article.

(3)  Disclosing any information relating to a consumer's debt by publishing or posting any list of consumers, except for credit reporting purposes and the publication and distribution of otherwise permissible "stop lists" to the point-of-sale locations where credit is extended, or by advertising for sale any claim to enforce payment thereof or in any other manner other than through legal process. (1977, c. 747, s. 4; 1979, c. 910.)
 
§ 75-54.  Deceptive representation.
No debt collector shall collect or attempt to collect a debt or obtain information concerning a consumer by any fraudulent, deceptive or misleading representation. Such representations include, but are not limited to, the following:

(1)  Communicating with the consumer other than in the name (or unique pseudonym) of the debt collector and the person or business on whose behalf the debt collector is acting or to whom the debt is owed.

(2)  Failing to disclose in all communications attempting to collect a debt that the purpose of such communication is to collect a debt.

(3)  Falsely representing that the debt collector has in his possession information or something of value for the consumer.

(4)  Falsely representing the character, extent, or amount of a debt against a consumer or of its status in any legal proceeding; falsely representing that the collector is in any way connected with any agency of the federal, State or local government; or falsely representing the creditor's rights or intentions.

(5)  Using or distributing or selling any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by a court, an official, or any other legally constituted or authorized authority, or which creates a false impression about its source.

(6)  Falsely representing that an existing obligation of the consumer may be increased by the addition of attorney's fees, investigation fees, service fees, or any other fees or charges.

(7)  Falsely representing the status or true nature of the services rendered by the debt collector or his business.

(8)  Communicating with the consumer in violation of the provisions of G.S. 62-159.1(a), 153A-277(b1), or 160A-314(b1).  (1977, c. 747, s. 4; 2009-302, s. 5.)
 
§ 75-55.  Unconscionable means.
No debt collector shall collect or attempt to collect any debt by use of any unconscionable means. Such means include, but are not limited to, the following:

(1)  Seeking or obtaining any written statement or acknowledgment in any form containing an affirmation of any debt by a consumer who has been declared bankrupt, an acknowledgment of any debt barred by the statute of limitations, or a waiver of any legal rights of the debtor without disclosing the nature and consequences of such affirmation or waiver and the fact that the consumer is not legally obligated to make such affirmation or waiver.

(2)  Collecting or attempting to collect from the consumer all or  any part of the debt collector's fee or charge for services rendered, collecting or attempting to collect any interest or other charge, fee or expense incidental to the principal debt unless legally entitled to such fee or charge.

(3)  Communicating with a consumer (other than a statement of account used in the normal course of business) whenever the debt collector has been notified by the consumer's attorney that he represents said consumer.

(4)  Bringing suit against the debtor in a county other than that  in which the debt was incurred or in which the debtor resides if the distances and amounts involved would make it impractical for the debtor to defend the claim. (1977, c. 747, s. 4.)

 § 75-56.  Application.
(a)  The specific and general provisions of this Article shall exclusively constitute the unfair or deceptive acts or practices proscribed by G.S. 75-1.1 in the area of commerce regulated by this Article.

(b)  Any debt collector who fails to comply with any provision of this Article with respect to any person is liable to such person in a private action in an amount equal to the sum of (i) any actual damage sustained by such person as a result of such failure and (ii) civil penalties the court may allow, but not less than five hundred dollars ($500.00) nor greater than four thousand dollars ($4,000) for each violation.

(c)  The remedies provided by this section shall be cumulative and in addition to remedies otherwise available. Any punitive damages assessed against a debt collector shall not be reduced by the amount of the civil penalty assessed against such debt collector pursuant to subsection (d) of this section.

(d)  Notwithstanding the provisions of G.S. 75-15.2 and G.S. 75-16, in private actions or actions instituted by the Attorney General, civil penalties in excess of four thousand dollars ($4,000) shall not be imposed.

(e)  The clear proceeds of civil penalties imposed in actions instituted by the Attorney General shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.  (1977, c. 747, s. 4; 1983, c. 417, s. 1; 1985 (Reg. Sess., 1986), c. 802; 1991, c. 68, s. 1; 1998-215, s. 101; 2009-573, s. 9.)