Making Post Dated Payments to a Debt Collector

When making the decision to pay off a debt after being contacted by a debt collector, some consumers opt to write several post dated checks to the collection agency so that they are relieved of the responsibility to make timely payments.  What is becoming more popular in the electronic age is automated withdrawals from bank accounts or providing a debit card to the collector.  Is this a good idea?  The Fair Debt Collection Practices Act (“FDCPA”), the federal statute enacted to protect consumers from abusive collection practices, will protect you in the event a collector acts outside the law, but it is not always recommended that you let the collector hold onto your payments or have that kind of access to your funds.  

Considering the fact that most consumers who have debt are unable to pay off their debts because they don’t have enough money, the FDCPA addresses the issue when a collector solicits postdated checks from a debtor.  The statute is clear regarding when a collector can cash a postdated check.  The statute reads that a collector who accepts a check or any post dated payment instrument, such as an automatic fund transfer or running a debit card, that has a postdate of more than five days must notify the consumer in writing prior to cashing the check, not more than ten days, but not less than three days, prior to making the deposit.  This notification will allow the consumer to ensure the funds are available for payment.  Failure to provide a consumer with this notice is a violation of the FDCPA and is grounds for filing suit and recovering damages for the collector’s violation including statutory damages of up to $1,000 and actual damages including any overdraft charges and fees from the bank in the event the funds were not available. 

The law is clear that a collector may not deposit a postdated check prior to the date the check was dated or take an automated payment prior to the agreed upon date.  Debt collectors often pressure consumers into writing giving a debit card number or postdated checks even when they don’t want to, so that they collector can assure the consumer is going to make a payment. Pressuring, coercing or threatening a consumer to write a postdated check is a violation of the law.   

While providing a debt collector with postdated checks or your debit card is not always the best option for a debtor, if you believe it is the right choice for you, make sure you know your rights under the FDCPA to ensure you are not taken advantage of by a debt collector.  If you believe your rights have been violated under the FDCPA, contact SmithMarco P.C. to speak with a licensed attorney for a completely free case review.