Michigan state debt collection laws

Regulation of collection practices (Act 70 of 1981)

445.252 Prohibited acts.

As per Michigan state debt collection laws, a collector cannot commit any one or more of the following:

1. Communicating with a debtor in a misleading or deceptive manner, such as stating himself as a government representative or a member of a certain credit bureau.
2. Using such forms or papers that appear to be legal.
3. Using seals or printed forms of a government agency or institution.
4. Making a misleading, deceptive or untrue statement or claim, or not revealing the purpose of a communication while collecting on a debt.
5. Stating that non-repayment of debt will lead to arrest or imprisonment, seizure or garnishment of the debtor’s property, or not stating the legal rights of the debtor.
6. Communicating with a debtor without disclosing the caller’s identity or cause expense to a debtor due to a long distance telephone call, telegram, or other reasons.
7. Communicating with a debtor, except through billing procedure when the debtor is being represented by an attorney.
8. Communicating information regarding a debtor’s indebtedness to an employer or a third party without the debtor’s authorization in writing, unless the communication is for acquiring location information about the debtor.
9. Threatening to physical harm while collecting on a debt.
10. Publishing or threatening to publish list of debtors, except for credit reporting requirements.
11. Undertaking harassing, abusive or oppressive methods to collect on a debt, or calling the debtor at inconvenient times or places. All communications should be strictly made between 8 a.m. to 9 p.m. unless the debtor agrees in writing to receive call at another time.
12. Using profane or obscene language.
13. Communicating with a debtor regarding debt by post card.

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445.253 Cease and desist order; hearing; action in circuit court; fine.

1. The state attorney general may order a regulated person to cease and desist from violating this act.
2. If a regulated person who is ordered to cease and desist files a written request within 30 days after the effective date of the order, he can be entitled to a hearing before an officer appointed by the attorney general.
3. If a regulated person doesn’t comply with the cease and desist order, the attorney general may initiate an action for the violation of the cease and desist order in a circuit court of Ingham county or in a circuit court where the person is doing business. The court may further impose a fine of more than $500.00 for each violation of the cease and desist order.

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445.256 Willful violation of act or engaging in recurring course of violation of act; penalties.

1. Under this act, if a court finds that a regulated person has willfully violated this act, the attorney general may file a petition in the court and recover on behalf of the state a civil fine not exceeding $500.00 per violation.
2. A regulated person engaged in willful violation of this act shall be fined more than $5,000 for the first violation, and more than $10,000 and imprisonment for more than one year for the second or subsequent violation.

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445.258 Communications with person other than the debtor to acquire location information.

1. A regulated person communicating with any person other than the debtor in order to acquire location information about the debtor must state all the following:
   1. The name of the person seeking location information.
   2. If the purpose of the communication is for verification or rectification of the debtor’s location information.
2. As per the act, a debtor’s location information shall consist only a debtor’s residence and place of employment’s addresses and telephone number of each place.

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