Texas residents should consider themselves lucky in that they enjoy some of the strongest consumer protection laws of any state. For starters, debt collection agencies and credit bureaus must be bonded to do business in Texas. Section 392.101 of the Texas Finance Code prohibits a third-party debt collector or credit bureau from engaging in debt collection in Texas unless the third-party debt collector or credit bureau has obtained a surety bond and filed a copy of the bond with the Office of the Secretary of State. Believe it or not, there are some collection agencies that are not even aware of this law and try to collect on debts from Texas residents. Usually, the people they are collecting from don’t know about this law either so they go unpunished. I had one collection agency that was listing a collection on my credit report and according to Texas law, the mere fact that they are reporting a debt on a Texan’s credit report is considered collection activity.
I investigate any collection agency that sends me a letter or places a collection account on any of my credit reports. I had never heard of this particular collection agency so I immediately did a search on the Texas Secretary of State’s website to see if this collection agency was licensed to do business in Texas. When I found out they were not licensed to conduct business here in Texas, I immediately drafted a letter to the collection agency advising them that they were in violation of Texas law. In the letter, I cited the particular law they were violating and Cc’d the letter to the Texas Attorney General’s Consumer Protection Division. Well, thirty days later, the collection was still on my report! I drafted a lawsuit petition and on it I placed a watermark that read “DRAFT,” and sent it to the registered agent of the collection agency so that they could forward the ‘draft’ of the lawsuit I was going to file if they didn’t remove the collection from my report immediately. Within 4 days of receiving my letter (you always send everything certified return receipt requested), the collection was removed. After the collection agency removed the account from my report, I sent them a follow up letter stating that I had decided to file a lawsuit as my rights under Texas law had been blatantly violated and that these violations had caused me to pay a higher interest rate on my loans. About a week later, I received a letter from an attorney representing the collection agency offering me what I thought was a reasonable settlement. I accepted and never heard from them again.
This is just one example of what consumer protection laws in Texas can do for Texans. I have spent over a year and a half researching these laws and can tell you that they are pro-consumer. This is not to say that collection agencies cannot go after you but, if they do, they had better have every detail about the debt they are trying to collect absolutely correct. The slightest error on their part will immediately put several laws at your disposal. With all the research I did I put forth a plan of attack and started cleaning up my credit reports of all collections because they were filled with incorrect information. After I saw how effective Texas laws were, I decided to write a book to inform my fellow Texans of this and other Texas laws so that they may be better informed of how strong and useful they are in protecting the consumer. There are many credit repair agencies popping up in Texas and they charge hundreds of dollars. Why waste that money when, for a lot less, you can do it yourself? Start your journey today to achieving what I like to call “excellent credit health.”