New Ruling: Debt Collectors Could Be Fined $1,500 Every Time They Call

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Consumers who don’t want to be contacted by debt collectors on their cellphones may have a powerful new ruling on their side. It may not only help them stop these calls, but it may increase the chances that they can collect damages of $500 to $1,500 per call.

In a recent 11th Circuit case, Osorio v. State Farm Bank, the court reinforced restrictions under the Telephone Consumer Protection Act that, among other things, prohibit collectors from using automated dialing systems (more commonly known as “robocalls”) to call consumers on their cellphones without the consumer’s express permission.

“The moral of that opinion is ‘no means no,’” says attorney Billy Howard, director of the consumer protection division of Morgan & Morgan.

The Telephone Consumer Protection Act has been federal law since 1991. It specifically aims to restrict telemarketing and the use of automated dialing systems to contact consumers without their express consent.

The reason this ruling is significant is that in the past, some courts have been divided on whether consumers who have given their cellphone number to a creditor or collector can revoke that permission, and if so, whether they can do so verbally.  In this case, the court opined that consumers who have given collectors permission to call their cellphones can revoke their consent verbally. “This is the only appellate opinion,” says Howard. “Although it’s not binding on someone in other parts of the country, it’s very persuasive,” he says.

Consumers who tell a bill collector not to contact them on their cellphone should understand there can be consequences, particularly if the collector has no other way to contact them. Ignoring collectors isn’t always a good strategy. But for consumers who are getting calls for the wrong person, for debts they don’t believe they owe, or for debts that are too old, this ruling could prove extremely helpful in their efforts to stop them. Even debtors who know they owe a debt but cannot afford to pay it may want to put a stop to robocalls on their cellphones.

“You can tell a debt collector, ‘Don’t call my cellphone. I will pay you when I can’,” Howard advises. That’s important, he says, because consumers should not feel pressured to pay those debts if they cannot make ends meet. “People should not pay their debts out of order. They should make their mortgage payments, buy food and medicine (and) take care of themselves and their families first.”

Consumers who are getting robocalls on their cellphones should keep accurate records of those calls, suggests Howard, and talk with a consumer law attorney.

Individuals dealing with collection accounts should also check their free credit reports to see whether those accounts appear on their credit. And because collection accounts can have a significant impact on credit scores, monitoring your credit scores (which you can get for free at is also a good step.

More on Managing Debt:

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Gerri Detweiler

Gerri Detweiler focuses on helping people understand their credit and debt, and writes about those issues, as well as financial legislation, budgeting, debt recovery and savings strategies. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of

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  • In 2009 i used my credit card to purchase a phone for $100. After as few days i changed my mind on the phone i wanted and i ended up paying another $100. I have a credit limit of $200 so it didnt bother me. Well after a few days sprint sent me a letter stating i had to pay a co payment...unfortunately i didnt have any money so i can to cancel the order. I was never reimbursed for the cells and they never paid the credit card company back ither. Well now i owe the card company almost $500. What should i do?

  • Collectors may call a third party to locate you. They cannot discuss the debt with those people. If they have found you the calls must cease. However, given the fact that you don't owe this debt and you've disputed it. it is entirely possible this collector is breaking the law. You can either contact a consumer law attorney or you can file a complaint with the Consumer Financial Protection Bureau.

  • Marie - I've never encountered this situation before. Did the physician tell your husband that he thought the tests were unnecessary before he ordered them? If so then I suppose the argument could be made that he should have found a different doctor. But if he wasn't warned of that fact, then perhaps you need to get a consumer law attorney involved to see whether he has any recourse for the credit damage.

  • This ruling is too little too late. Credit applications ALREADY have contract clauses that state that, by applying for a credit card, you agree to be contacted via any phone number you list on your application. If you don't sign the agreement, you don;t get the credit card. It's blackmail. They don;t care that your phone, which you pay for, is for your convenience, not theirs. Also, why would the article tell people who are already in trouble and have no money, to contact a lawyer to defend themselves against unscrupulous collectors?? Who is going to pay the lawyer?? Don;t you think those collectors know that? Finally, if they want meaningful reform on the collection industry, they should make it illegal for a collection agency to sell accounts to another collection agency. You have already been penalized and punished with 7 years of bad credit and collection accounts on your credit. When is enough, enough? Collectors get away with legal extortion.

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Gerri Detweiler
Tags: Collections