Workplace Debt Collection: Threat

Workplace debt collection protection is critical for employees navigating challenging financial times. Unscrupulous companies may use aggressive and illegal tactics to collect debts, including contacting people at their workplace. This can threaten your employment or put undue pressure on you to pay debts, even if you don’t actually owe them.

The Consumer Financial Protection Bureau (CFPB) is actively cracking down on companies that harass consumers, including those who unlawfully contact their employers. Past actions include multi-million dollar relief from debt collectors illegally contacting commanding officers of military members and penalties for unfair practices like contacting consumers at work after being told not to.

CFPB examiners have recently found companies unfairly calling people’s references and workplaces after being asked to stop. They have also identified abusive language in loan applications suggesting consent to illegal workplace calls. Law enforcement officials are urged to look out for companies using workplace contact to coerce debt payments, including debts not actually owed.

The CFPB is also concerned about companies exploiting an outdated FDCPA provision allowing debt collectors to contact third parties for “location information,” including “place of employment.” Congress should consider repealing this provision. Companies may be calling you at work (or threatening to do so) when the real goal is to embarrass, pressure, or otherwise coerce you to pay.

Protecting Yourself: Workplace Debt Collection Protection

There are several actions you can take to ensure workplace debt collection protection:

Tell them to stop contacting you at work. The FDCPA prohibits debt collectors from communicating with you at your workplace if they know your employer prohibits such communications.
Demand that they stop contacting you completely. Notify them in writing that you want communications to cease or that you refuse to pay the debt. The CFPB provides template letters for this purpose.
Submit a complaint with the CFPB. If you have experienced improper debt collection in the workplace, submit a complaint with the CFPB.

CFPB Initiatives to Protect Workers

The CFPB’s work in this area is part of its effort to protect consumers from unfair contract terms. Other initiatives include curbing unchecked worker surveillance, addressing employer-driven debt, taking action against vocational schools making false claims, and clarifying the application of the Equal Credit Opportunity Act to franchisees.

For more information, see Can debt collectors tell other people, like family, friends, or my employer, about my debt?. Also, see related Fraudulents news.