October 30, 2013

Bank of America to Pay $32 Million to Resolve Debt Collector Harassment Claims

New York, NY: When it comes to debt collector harassment, it’s not just third-party companies charged with collecting debts who are accused of breaking the law. Bank of America has reportedly just agreed to pay $32 million to settle claims of bill collector harassment on the part of the bank. The debt collector lawsuit was filed after customers complained they received harassing phone calls from the bank.

Bank of America to Pay Million to Resolve Debt Collector Harassment ClaimsAccording to Commercial Banking News (10/10/13), the lawsuit was filed on behalf of Bank of America’s credit card and mortgage loan customers and alleged Bank of America made harassing phone calls to those customers on their cell phones. Furthermore, the lawsuit alleges, the phone calls were actually prerecorded, meaning customers could not ask the person on the phone to stop making the phone calls. Some customers allegedly received up to 10 phone calls a day, at all hours of the day.

Consumers are protected from harassing phone calls by the Telephone Consumer Protection Act, which makes auto-dialed calls to cell phones illegal when the customer’s permission to make the calls has not been given. Bank of America has denied the charges but agreed to the settlement to avoid further legal costs.

Approximately eight million customers are affected by the settlement, which will also see Bank of America only phoning cell phones if a customer has given permission to do so.

According to the Consumer Financial Protection Bureau (CFPB), there are approximately 30 million Americans being pursued by debt collectors owing an average of $1,500. The CFPB currently oversees firms that make more than $10 million annually in activities related to consumer debt collection. The CFPB will examine such debt collectors to ensure they are upfront and honest in identifying themselves and the amount of debt owed, use accurate information when they pursue a debt, and have a dispute resolution process to address consumer complaints and disputes.

There are rules governing when and how debt collectors contact consumers. These rules prohibit harassing phone calls, calls made outside of certain times of day and calls that involve threatening language, including threatening personal injury to the consumer or threatening jail time if the debt is not paid. Lawsuits have been filed against various debt collection companies alleging they broke the rules by harassing consumers.