If you live in Georgia, there are laws to protect you from abusive or overreaching debt collection tactics. One of those laws, the Georgia Industrial Loan Act (Georgia ILA), applies to consumer loans less than $3,000 with a loan length less than 36 months and 15 days. This law offers protection in addition to the federal Fair Debt Collection Practices Act (FDCPA).
This article explains this specific debt collection law for people who live in Georgia and what you can do if a debt collector violates the law.
The Federal Fair Debt Collection Practices Act
The FDCPA protects consumers who owe money to merchants, credit card companies, or others for household debts. It prevents debt collection agencies from using intrusive or deceptive practices when collecting debts. (To learn more about the FDCPA, visit our Illegal Debt Collection Practices topic area.)
Keep in mind, however, that the FDCPA does not erase the debt, nor does it restrict the creditor’s options for taking legal action.
Georgia Industrial Loan Act
State debt collection laws are enacted to provide the consumer with additional protections that extend beyond the FDCPA. Georgia has enacted the Georgia Industrial Loan Act which applies only to loans or advances of money of $3,000 or less. For loans in excess of $3,000 or for consumer credit other than cash loans, the federal FDCPA applies.
Consumer Protections Under the Georgia Industrial Loan Act
The Georgia Industrial Loan Act protects consumers in a few different ways.
- It requires a license to make consumer loans of $3,000 or less. (The Georgia ILA does however exempt certain parties from the license requirement, including banks, trust companies, real estate or mortgage companies, and the University System of Georgia.)
- The Georgia ILA limits the amount of fees, interest, and late charges that may be charged to the consumer.
- The borrower is entitled to a written itemized statement showing the date and amount of the loan. In addition, the statement must show the schedule of payments, the type of security for the loan, the actual cash advanced to the borrower, and the amount of interest and fees.
- The creditor must follow proper procedures when extending the debt and may not resort to abusive debt collection practices.
Prohibited Debt Collection Activities Under Georgia Industrial Loan Act
The Georgia ILA seeks to curb abusive debt collection practices. Specifically the debt collector may not:
Harm or Threaten to Use Violence
- cause the borrower to suffer bodily injury or physical harm or threaten to use violence or criminal means to cause harm to the person, reputation or property of the person
- falsely accuse or threaten to accuse any person of any crime
- use obscene or profane language, or place phone calls with the intent to annoy, harass or threaten the consumer, or
- trespass by force the borrower’s home or personal property without the legal right to do so.
Harass or Embarrass the Debtor
- cause the consumer to incur expenses (long distance telephone tolls, telegram fees) by concealing that the purpose of the call is to collect a debt
- make false accusations to another person that the consumer is willfully refusing to pay a debt
- call the debtor between 10 p.m. and 5 a.m.
- disclose information about the consumer’s indebtedness to unrelated persons, or
- publish or post a “deadbeat list” of consumers.
Make False or Misleading Representations to the Debtor
- use printed material which simulates legal process (mimics a summons or warrant)
- disguise the debt collector’s true name
- fail to disclose that the debt collector is attempting to collect a debt
- falsely represent the amount, character or extent of the claim, or
- falsely represent that additional fees or charges may be added to the existing debt when in fact such fees or charges may not be added.
Engage in Unfair Debt Collection Practices
- seek affirmation of the debt from a consumer in bankruptcy even though the consumer is not legally obligated to affirm the debt, or
- seek a written agreement or acknowledgement from the consumer that the obligation was for consumer purposes when the original debt was not consumer debt.
Legal Remedies for Violating the Georgia Industrial Loan Act
If you feel that a debt collector or collection agency has violated the Georgia ILA, you have several options.
File a complaint with the Georgia Industrial Loan Commissioner. The Georgia Industrial Loan Commissioner is empowered to investigate complaints and may take disciplinary or legal action for violations of the Georgia Industrial Loan Act. For instance, the Industrial Loan Commissioner may suspend or revoke the lender’s business license for unreasonable collection tactics. The Industrial Loan Commissioner may also levy fines for violations of the Industrial Loan Act.
A lender may even be found criminally liable for violating the Georgia ILA. If the lender knowingly and willfully violated the Georgia ILA with an intent to defraud the borrower, the court may find the lender guilty of a misdemeanor and declare the loan null and void.
Bring a civil lawsuit. You can sue the creditor, debt collector, or collection agency that intentionally violates the Georgia Industrial Loan Act. If you win, you can get twice the amount of the interest and loan fees (but no less than $100).
The Georgia Industrial Loan Act does not permit class action lawsuits and any violations of the Georgia Industrial Loan Act must be brought only as an individual action.
Getting More Information
The full text of the Georgia Industrial Loan Act is located at Georgia Code Ann. §§ 7-3-1 to 7-3-29. Further administrative rules and regulations implementing the Georgia Industrial Loan Act can be found at Ga. Comp. R. & Regs. §§ 120-1-14-.01 to 120-1-14-.25. (To learn how to find state statutes, visit Nolo’s Legal Research Center.)