An Overview of the FDCPA
The Fair Debt Collection Practices Act, more commonly known as the FDCPA, was instituted by the Federal Trade Commission to protect consumers from harassing collections calls, and other unlawful means of collecting debts. The law was passed to work in conjunction with the Consumer Credit Protection Act and laws within each state that attorneys may cite to defend clients against unlawful collection methods. The United States Congress passed the law in 1978 to govern the actions of debt collectors or collection agencies who are hired to collect money owed by consumers for products or services. The evidence of overwhelming misuse of collection practices prompted Congress to enact the law to protect consumers.
The less than ethical ways that debt collectors use to collect personal debts are well known, and have caused nightmares for thousands of consumers who simply don’t know their rights. Personal debts may include credit card bills, home or auto loans, medical bills, and even pay day loans. If you owe a debt to a company, you have to be aware of some important considerations, so that you know how to handle situations in which you are harassed or even threatened. When you’re informed, you can be in control of the situation, and not deal with the stress and anxiety caused by unethical collection agencies. If your rights have been violated, you can have legal representation to resolve the dispute.
Debt collection agents are allowed to do certain things under the law. Anytime a third party is used in order to collect a debt, they must follow the regulations set forth under the federal law. The FDCPA has very specific restrictions regarding collection practices by third parties. If they don’t comply with the law, they are subject to a number of possible legal actions, including civil liability. Any form of malicious or unscrupulous collection methods are never to be used and are against the law. Some debtors are subjected to repeated communication by collectors, and should be aware that they can take appropriate action against the offender.
Harassment is a serious crime, and depending upon the severity, can be punishable by a fine or prison. Harassment and stalking laws may refer to phone calls, or any form of written communication including electronic communications. Even if you are exposed to materials that the offender feels are intimidating to you, for example written threats by a third party collection agency, it may be considered a crime, so you must be aware of the laws in your state. If you feel that your rights have been violated, you should consult an attorney who represents consumers in collection cases. You can find a lawyer who is willing to do a free consultation.
Under the law, a third party debt collector is not allowed to make collections calls prior to 8 a.m., or after 9 p.m. They may not call you at work if they have been made aware that your employer will not tolerate repeated personal calls, or during any other hours that are not considered appropriate. However, this doesn’t apply to weekends or even holidays, unless the collection agency is aware that it would be inconvenient for the debtor.
Some debt collectors will use autodialers to contact debtors, and this can happen repeatedly. However, a debt collector may not call a cell phone or a number that is in the name of a third party, unless they have been given permission previously. If you are repeatedly contacted at work, send a letter to the collection agency stating that your employer does not allow personal calls on company time. If your employer is willing to send a letter to the agent, they must end the communication. Your company may have a written policy regarding personal communication during business hours, and this could be used to your advantage.
The collection agent may not in any way harass, verbally abuse, or attempt to oppress you. They are not allowed to lie to you or to imply that you intentionally committed a crime, or make misleading or false threats, including threatening to have you arrested and imprisoned if you don’t pay the debt. You may have to deal with a person who claims to be an attorney, which is considered to be a false representation. Impersonating an attorney can conceivably cause the accused person to face a prison sentence, however this depends upon the situation. If impersonating an attorney is an attempt to obtain property or money by deceptive means, they can be charged with a crime. Anyone who makes excessive phone calls in an attempt to upset or disturb you in any way, is in violation of the law.
Under The Fair Debt Collection Practices Act, the debt collector may not use unscrupulous or unfair practices in order to collect a debt. When the agent calls you, it’s illegal for him or her to attempt to conceal who they are. This is a petty misdemeanor. If you send them a letter requesting that they do not call you or contact you in any way, they must stop. You can use a form “Cease and Desist” letter to contact them. You can’t simply call the company and request that they don’t have any further communication with you. It must be in writing to be valid. The FDCPA expressly states the terms under which communication may take place, and how the collection agent must act when dealing with a debtor, or when they’re having any communication with anyone other than the debtor. This includes family members, employers, fellow employees, or friends. A debt collector is not allowed to inquire of any other party about your location in order to find out your whereabouts. The law states that the agent may not provide any information regarding your personal debt to any third party with the exception of your spouse, or a parent if you are a minor.
Another important point about the federal law is that collection agents are not allowed to use language or any type of symbol indicating that the communication is for a debt, on postcards or envelopes. As a matter of fact, using a postcard as a means of communication when attempting to collect any debt is unlawful. If you choose to get legal representation to handle your case, they can no longer have any communication with you, by mail, phone, in person, or by electronic means such as fax or email. If they do contact you, they’re in violation of the law and could face legal action. To elaborate further, the third party is strictly prohibited from using harassment by any means against you or anyone in your family.
Collectors aren’t allowed under the law, to make violent threats against the person owing the debt or their property, including threatening to take control of your personal property and sell it. They may not threaten a debtor in any way with legal action unless litigation against the debtor is being contemplated. They aren’t allowed to say or do anything that would tarnish the reputation of the debtor. Another way in which a third party could be in violation of the federal law is if they’ve been informed that the debtor has no means of repaying the debt and they continue to call or harass them. Another method commonly used by third parties when attempting to collect a debt, is to threaten to deposit a postdated check given to them, and under no circumstances can they deposit the check. They may not change the amount on a check they’ve been given.
When making collection calls, the agent is prohibited from using obscene language, and they cannot use profane language in any written communications. Collectors are not allowed to publish the names of debtors in any kind of listing service regarding consumers, as a means of publicly humiliating them and allowing the general public to know they haven’t paid a debt, unless it’s to a consumer credit agency. Consumers have certain rights under this law, and if any collection agent does violate your rights, you could be compensated for up to $1,000 for each violation that was committed by the third party agency.
The law provides consumers who are facing debt collecting with means to challenge third party agents who are demanding money from them. Even more important to consumers, the law established ethical regulations regarding the methods that may be used to collect debts. The consumer has the right to determine if a debt is actually valid and accurate, as a means of further protecting their rights. On an annual basis, the Federal Trade Commission provides a written report to the members of the U.S. Congress, which details methods used to enforce the law during the previous year, with a detailed summary of thousands of complaints by consumers, in which allegations of violations of the law by collection agencies are set forth. The serious nature of such allegations cannot be stressed strongly enough. In 2005 alone, over 66,000 complaints were filed by consumers for violations of the law. Harassing practices by debt collection companies are personally and emotionally damaging to thousands of people, and in many cases have contributed to marriages breaking up, foreclosures, personal bankruptcy cases rising, job loss, and a serious invasion of the individual’s privacy.
Although the law was enacted to apply strictly to third party companies, and not to the company the debt was originally owed to, a number of states have enacted their own laws which broaden the federal law to include violations within their state that under the states consumer protection statutes, may include the original creditor in any legal action that they take in defense of the consumer. Actions such as this by individual states are permitted under federal law. You must be aware of your rights.
When you’re contacted by a collection agency, you have 30 days to dispute any or all of the debt. The third party must have written proof of the debt you owe, and they must stop all communication with you until their findings have been mailed to you. If you choose, you may send a request in writing to the debt collector informing them that you want all communication to stop. They have only one opportunity to contact you to let you know what actions may be taken against you, or to let you know that they won’t be in contact with you any further. However, you should be aware that if you choose this option, legal action could be initiated against you. This could have serious repurcussions if a judgment is ruled against you in court. Debt collectors count on debtors not being aware of their rights, so they attempt to collect by using scare tactics. Learn what you need to know about The Fair Debt Collection Practices Act, and what your rights are under the FDCPA, when it comes to collections calls.
The Federal Fair Debt Collection Practices Act governs all personal debt collections in the United States. Think of it as part 1 of the collections game rulebook. Click here to read the full Fair Debt Collection Practices Act.
Now there is a part 2 to the collections game rulebook. It covers HOW the debt is reported to the credit bureaus. Your credit report is the first thing debt collectors try hold hostage and use to manipulate you into paying. Let’s look at what they can and can’t do by studying The Federal Fair Credit Reporting Act.