The Michigan Collection Practices Act

The Michigan Regulation of Collection Practices Act is designed to protect the consumer from unethical acts in attempts to collect a debt by other people not connected to an established and regulated collection agency. Collection agencies are regulated under another act. To control and plug a hole in collection activities by unscrupulous people not regulated as a collection agency the state took the further step of passing and enforcing this act. People regulated through this act include any person whose collection activities are on behalf of a collection agency. They include an employee of the store who sold the goods, a bank, trust or savings bank collecting its own claim, a public officer or a person acting under court order, or an attorney acting on hid or a client's behalf.

A person regulated under this act cannot communicate with a debtor in a misleading or deceptive manner to include failure to tell you who is calling or disguising the true intent of the contact to collect a debt. He cannot use forms which have the look like they are tied to a court or other government agency. He cannot lie about what legal action has been taken or not taken or the legal rights of the creditor or debtor. There can be not threats that nonpayment will result in your arrest, or that the creditor will seizure the debtor's property or garnish his wages. Other actions barred by this act include use of profane language, threatening physical harm, and threatening or doing any action to bring to the public attention your debt status such as using a post card or public notices.

The collector must not harass you. The use of harassing, oppressive, or abusive methods to collect a debt, include repeated calls, hang up calls, or calling at unusual times or places known to be inconvenient to the debtor. All calls must be made between 8 in the morning and 9 at night. The collector also can not call you after being notified that you have an attorney and been given a way to contact that attorney by phone and mail except to send you a bill for the debt. Communication is also prohibited with your employer but a big loop hole is left because it is legal to contact your employer to try to obtain your address or other means of locating you. A regulated person communicating with any person other than the debtor, for the purpose of acquiring location information about the debtor, must tell the person contacted the name of the individual seeking the information and whether the purpose of the communication is for confirmation or correction of location information about the debtor. The employer or other person contacted should give only the debtor's address, place of employment, and the telephone number at each place.

The penalties for violation of this act range from a simple cease and desist order from the attorney general office to fines of $10,000 and imprisonment up to one year. If the cease and desist order is ignored the fine is $500 for each violation. This fine also applies to anyone found willfully violating this act. If the violation is intentional and repeated without regard to the act can be fined not more than $5,000.00 for the first offense, and not more than $10,000.00, or imprisoned for not more than 1 year, or both, for a second or subsequent offense.

You may bring action against anyone found in violation of this act if you have suffered injury, loss, or damage. If the court agrees with you that the actions taken by the collector were in violation of the act, you can recover actual damages or $50.00, whichever is greater. If the court finds that the method, act, or practice was a willful violation, the court may assess a civil fine of not less than three times the actual damages, or $150.00, whichever is greater, and will force the violator to pay reasonable attorney's fees and court costs incurred in connection with the action.