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What to do if a debt collector overbills you

Complaints against debt collectors continued strong during the pandemic

Summary

The FTC and the New York attorney general settled a case in 2020 against a New York debt collector accused of overbilling or “overbiffing” consumers, besides several other fair debt collection violations. Here’s what you can do if overbilling happens to you.

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Have you ever heard of a debt collector practice called “overbiffing?” It seems consumers are always complaining about debt collectors, and this practice of “overbiffing” is one more to add to that list.

As the pandemic raged in 2020, the Consumer Financial Protection Bureau received 10% more complaints, or a total of 82,700 complaints, about debt collectors (both original debtors and third-party collection activities) than it did the previous year.

Debt collectors have been implicated in the past for various unfair practices such as threatening to sue consumers and trying to collect on debt that is past its statute of limitations, but what is “overbiffing?”

See related: How to recognize a debt collection scam

Debt collector overbilled consumers

The Federal Trade Commission and the New York attorney general settled a case against a debt collector in 2020 for the offense of overbilling. Considering that consumers are supposed to pay their “balance in full” which is abbreviated as BIF, debt collectors tend to refer to the practice of charging more than the balance due as “overbiffing.”

According to the case that the FTC and the New York AG initiated in 2018, a group of Buffalo companies under the control of defendant Robert Heidenreich engaged in this practice. The forms used by these debt collectors had two entries, one for the consumer’s actual balance due, or “client balance,” and another for “balance given,” or what the debt collectors told the debtors that they owed. The balances overbiffed were found to be hundreds of dollars, and in some instances even thousands, over the actual amounts owed.

See related: What happens if you ignore debt collectors?

Defendants engaged in other outlawed practices

In addition to overbilling, it seems Heidenreich’s debt collectors also engaged in other unfair practices. When they called the debtors, they did not reveal that they were debt collectors. Instead, they said they were process servers or affiliated with the county sheriff’s office.

They threatened consumers with arrest or a lawsuit or said they would be served papers if the consumers did not pay the money owed immediately. The debt collectors would even offer to connect them with an attorney to help the consumer avoid getting arrested.

The so-called attorneys were actually other debt collectors and not attorneys. In at least one case, they got a threatened consumer to make debit card payments while on the phone call.

In another violation of the Fair Debt Collection Practices Act, this group of debt collectors had been known to call debtors’ employers and families to tell them about the debts. They also engaged in abusive language in talking about the debtors to others. For instance, using stronger terms, collectors referred to debtors as “dumb.”

In the 2020 settlement with the New York AG, Heidenreich was banned from the debt collection industry. He was also assessed a $1.7 million penalty that was suspended to $30,000 since he was not able to pay this amount in full. The funds from this settlement were to go toward “consumer restitution.”

See related: What to do if a debt collector threatens to sue you

What to do if you have been a victim of overbilling

This case involves a variety of FDCPA violations. For one, debt collectors should not be overbilling debtors. They are not supposed to misrepresent the amount of money due to them.

  • In case you think a debt collector has overbilled you, verify the actual amount you owe by asking the debt collector to validate the debt in writing for you.
  • You could also look into the accuracy of the debt yourself by pulling your credit report (which the three major credit bureaus are providing for free weekly through April 2022 at AnnualCreditReport.com).
  • See if you can sort out the matter with the debt collector by sending them proof of your overpayment.
  • If that doesn’t work, you could file a complaint about the incident with the FTC and your state’s attorney general.

If you need additional help, an attorney could also assist you in determining your rights in this matter and in taking action against the debt collector.

Contact me at pthangavelu@redventures.com with your credit card-related questions.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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