For the past several years, debt settlement companies have been sending out mailers to advertise their services. These mailers are highly deceptive in that oftentimes the debt settlement company designs the mailer in such a way as to deceive the potential consumer into believing it is from a governmental agency. The debt settlement companies will go to great lengths to give the mailer an official appearance by placing official looking emblems on the mailers, citing federal statutes that do not exist, or have nothing to do with debt settlement, and giving the consumer a “case number” or “claim number.” Some companies have even went so far as to obtain a P.O. Box in Washington D.C.
These deceptive mailers oftentimes contain private personal information. There are some key red flags that identify potential FCRA violations:
- The mailer contains a figure with your unsecured debt amount that is in fact your accurate unsecured debt amount. This is a big red flag as there are only two ways in which a company is able to obtain this data. Either you have somehow given the company the information, or the company has impermissibly accessed your credit report. Most mailers will disclaim that your debt balance is only an “estimate,” but if they have your actual balance or a range that your balance fits within, it likely originated from your credit report.
- The mailer contains language that indicates the company knows of your “recent delinquencies.” Again, there is only one way for a debt settlement company to know that you have recent delinquencies, and that is from a credit report.
- Other language that demonstrates knowledge of your private credit reporting data.
- Some mailers actually indicate that the information was obtained from a credit report.
Not all mailers that contain credit reporting information represent violations of the FCRA. Insurance companies and financial institutions that are making you a “firm offer of credit” are able to obtain credit reporting information as these are two permissible purposes. Debt settlement companies do not have a permissible purpose, and as such, have no business accessing your credit report. Some debt settlement companies use “model” or “demographic” data. These terms refer to the type of data that is simply an average based on the plus four of a zip code. This type of data is very inaccurate and certainly would not be able to identify consumers that have recent delinquencies. If you receive one of these mailers, consult a consumer law attorney immediately. This type of case is very complicated and it is very difficult to determine all causes of action such as the violations of the FCRA and the deceptive nature of the mailer.