What is an "Unsophisticated Borrower"?

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A lot of debt collection laws make mention of an “unsophisticated borrower.” Unfortunately, it isn’t immediately clear what that term means, even though its meaning is relatively straightforward.

The term “unsophisticated borrower” often refers to borrowers who have been taken advantage of due to unscrupulous or illegal loan practices. For example, people who have qualified for subprime loans due to lowered borrowing standards are often considered “unsophisticated borrowers.” The same goes for people who were misled into taking out loans that are nearly impossible to pay off given their income.

What If You’re an “Unsophisticated Borrower”?

If you think that you’ve been taken advantage of, you may be a little embarrassed. There’s no need to be, whether you were targeted by an unscrupulous lender or debt collector.

Naturally, if you have a debt, you’ll have to pay it off, no matter what--even if you were considered to be an unsophisticated borrower. But if a third-party collector tries to collect on that debt in a very aggressive way, that collector’s behavior could be illegal. That collector isn’t allowed to call you at odd hours, use profane language, or discuss your debt with anyone but you, your spouse, or your attorney.

However, if that collector engages in any of that type of behavior, you can make them stop. An FDCPA attorney can get those collectors to stop bothering you. In fact, you might even be entitled to compensation--up to $1,000 per violation. Even if you’re an unsophisticated borrower, you still deserve protection-- not harassment.