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Creditors cannot contact commands

21 Jan 2011 | Capt. David Segraves

With a few exceptions, a Marine’s creditors are violating California and possibly federal law when they contact a Marine’s chain of command. Marines and their commands need to present a unified front to repel this inappropriate contact. Knowing the rights of Marines will save time for commands and relieve the anxiety of Marines whose creditors threaten the Marines’ careers.

First, make no mistake, Marines need to keep their honor clean and pay their debts. Nothing in this article suggests otherwise. However, Marines need to assert their rights when creditors violate the law and commands need to assist Marines in asserting their rights.

Per the Fair Debt Collection Practices Act (15 USC 1692), debt collectors cannot contact debtors at their place of business if they know or have reason to know the employer prohibits the consumer from receiving such communication. California law under its Fair Debt Collection Practices law (Cal. Civ. Code 1788) expands debt collectors to include anyone who collects debts on behalf of himself or herself. The Marine Corps recognizes these issues in paragraph 16002(3) of the LEGADMINMAN, which states “Processing of complaints of indebtedness will not be extended to those creditors who are in violation of State law.” It goes further to say “Commanders may advise creditors that this policy has been established.”

Exceptions do exist for these prohibitions. Creditors may contact an employer (1) if the debtor has consented in writing to the communication, (2) for the purpose of effecting wage garnishment after a court judgment, (3) for discovering medical insurance if the debt is a medical debt or (4) verifying the debtor’s employment. Knowing these exceptions, Marines should be wary of signing any documents that consent to possible future creditors contacting their employers. If creditors do contact commands, as stated above, the command should notify the creditor on the prohibition for contacting them and make a log of the call. When a violation has occurred, the Marine should send a letter via certified mail notifying the creditor of the violation and that further violations of the California Fair Debt Collection Practices law subject the creditor to a lawsuit for actual damages (if the interaction adversely affects the Marine’s career) and penalties of between $100 to $1,000 per violation (Cal Civ. Code 1788.30). In a suit for these violations, Marines may collect their costs including attorney’s fees if the creditor acted in bad faith.

Like many consumer protection laws, the Federal and California versions of the Fair Debt Collection Practices provide many rights, including many not addressed in this article. But consumers must first know their rights and exercise them to receive the benefit of these laws.

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Marine Corps Air Ground Combat Center Twentynine Palms