Debt negotiation and getting out of debt can be a difficult task when collectors and creditors are hounding you. Anyone who has had to deal with a debt collection agency knows how frustrating the experience can be.

In response to past abuses by collectors, state and federal lawmakers have enacted a wide variety of consumer protection laws that control the way debt collectors can operate, including the Fair Debt Collection Practices Act (FDCPA). Recently, the FDCPA played a major role when a collections firm went too far in trying to collect a debt.

In the recent case, the collector repeatedly tried to collect on a delinquent Target credit card from the wrong woman. When Target referred the debt to the collection firm, Target gave the firm the debtor's correct name and correct Social Security number.

When the collection firm first contacted the woman, she informed them that she never had a Target credit card and that she often received calls from collectors looking for a woman in the area who had the same name. However, the collection firm filed a lawsuit against the woman and obtained an order garnishing her wages in April 2007. However, her employer insisted that the collector had the wrong person and the order was dropped.

In 2009, the firm again sued on the Target credit card debt and won another garnishment order. This order stayed in place until the woman sued the collection firm for violations of the FDCPA. During her lawsuit, her legal team discovered that an employee at the firm had changed the Social Security number in the firm's files from that of the true debtor to match the woman's, even though Target had provided the firm with the correct number.

Late last month, a federal jury found that the collections firm violated the FDCPA and awarded the woman $161,000 in compensatory damages and awarded her an additional $1.1 million in punitive damages.

As this story demonstrates, people have rights in the debt negotiation and debt collection process. When debt collectors do not play by the rules, debtors have the legal right to seek justice.

Source: Collections & Credit Risk, "Woman Awarded $1.26M In Collection Wage Garnishment Case," July 31, 2011