Debts and Credit – Fair Debt Collection Act – United States
Note: This summary is not intended to be an all inclusive summary of the Fair Debt Collection Practices Act but does include many issues.
Who Is a Debt Collector? According to the Federal Fair Debt Collection Act, a debt collector is any person, other than the creditor, who regularly collects debts owed to others. Federal Fair Debt Collection Act was amended in 1986 to include attorneys who collect debt on a regular basis. However, this amendment does not apply to attorneys who only handle debt collection matters a few times a year.
What Debts Are Covered? Personal, family, and household debts are covered under the Act. This includes money owed for medical care, charge accounts, and even car purchases.
How May a Debt Collector Contact You? A debt collector may contact you in person, by mail, telephone, or telegram. However, a debt collector may not contact you at inconvenient or unusual times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector may not contact you at work if the debt collector has reason to know that your employer disapproves.
Can You Stop a Debt Collector From Contacting You? You may stop a debt collector from contacting you by writing a letter to the collection agency telling them to stop. Once the agency receives your letter, they may not contact you again except to notify you that some specific action will be taken, which could include the instigation of legal action.
May a Debt Collector Contact Any Other Person Concerning Your Debt? A collector can only contact you and your attorney. Generally, the collector is not allowed to tell anyone other than you and your attorney that you owe money. If you do not have an attorney, the debt collector may contact other people, but only to find out where you live or work. Furthermore, the collector is usually prohibited from contacting any person, other than you or your attorney, more than once.
What Is the Debt Collector Required To Tell You About the Debt? Within five days after you are first contacted, the debt collector must send you a written notice telling you the amount of money you owe, the name of the creditor to whom you owe the money, and what to do if you believe you do not owe the money.
If You Believe You Do Not Owe the Money, May a Debt Collector Continue To Contact You? The debt collector may not contact you if, within 30 days after you are first contacted, you send the collector a letter saying you do not owe the money. However, a debt collector can begin collection activities again if you are sent proof of the debt, such as a copy of the bill.
What Types Of Debt Collection Practices Are Prohibited? Harassment: Debt collectors may not harass, oppress, or abuse any person. Debt collectors may not: (a)Use threats of violence or harm to the person, property, or reputation. (b) Advertise your debt or publish a list of consumers who refuse to pay their debts (except to a credit bureau). (c) Use obscene or profane language. (d) Repeatedly use the telephone to annoy omeone. (e) Telephone people without identifying themselves.
False statements. Debt collectors may not use any false statements when collecting a debt. Debt collectors may not: (a) Falsely imply that they are an attorney or government representative. (b) Falsely imply that you have committed a crime. (c) Falsely represent that they operate or work for a credit bureau. (d) Misrepresent the amount of the debt. (e) Indicate that papers being sent are legal forms when they are not. (f) Indicate that papers being sent are not legal forms when they are.
Debt collectors may not say that: (a) You will be arrested if you do not pay your debt. (b) They will seize, garnish, attach, or sell your property or wages, unless the collection agency or the creditor intends to do so, and it is legal. (c) Actions will be taken against you which legally may not be taken.
Debt collectors may not: (a) Give false credit information about you to anyone. (b) Send you anything that looks like an official document from a court or government agency when it is not. (c)Use a false name.
Unfair Practices. Debt collectors may not engage in unfair practices in attempting to collect a debt. Debt collectors may not: (a) Collect any amount greater than your debt, unless allowed by law. (b) Deposit a post-dated check before the date on the check. (c) Make you accept collect calls or pay for telegrams. (d) Take or threaten to take your property unless this can be done legally. (e) Contact you by postcard.
What Control Do You Have Over Payment Of Debts? If you owe several debts, any payment you make must be applied to the debt you choose. A debt collector may not apply a payment to any debt you believe you do not owe.
What Can You Do If You Believe a Debt Collector Broke the Law? You have the right to sue a debt collector in a state or federal court within one year from the date you believe the law was violated. If you win, you may recover money for the damage you suffered, plus court costs and attorney’s fees. A group of people may sue a debt collector and recover money for damages up to $500,000 or one percent of the collector’s net worth, whichever is less.
Attorneys or law firms that engage in traditional debt collection activities (sending dunning letters, making collection calls to consumers) are covered by the FDCPA, but those whose practice is limited to legal activities are not covered.
Similarly, filing or service of a complaint or other legal paper (or transmission of a notice that is a legal prerequisite to enforcement of a debt) is not a communication” covered by the FDCPA, but traditional collection efforts are covered.
A student loan is a “debt” covered by the FDCPA; however, alimony, tort claims, and non-pecuniary obligations are not covered.
A salaried attorney who collects debts on behalf of, and in the name of, his creditor employer,and a state educational agency that collects student loans, are exempt from coverage by the FDCPA.
Debt collectors (including attorney debt collectors) are subject to the venue limitations of the FDCPA.
An attorney debt collector, who represents either (1) a creditor or (2) a debt collector that previously tried to collect an account, may report his collection efforts to the debt collector.
An attorney may communicate with a witness in a lawsuit that has been filed.
A debt collector may provide a list of consumers, against whom judgments have been entered, to an investigator in order to locate such individuals.
A debt collector may place a public notice required by law as a prerequisite to enforcing the debt.
An attorney debt collector must provide the required validation notice, even if a previous debt collector (or the creditor) has given such notice.
A debt collector does not comply with the obligation to verify the debt simply by including proof with the first communication to the consumer.
An attorney debt collector may take legal action within 30 days of sending the required validation notice, regardless of whether the consumer disputes the debt; if the consumer disputes the debt, the attorney may still take legal action but must cease other collection efforts (e.g., letters or calls to the consumer) until verification is obtained and mailed to the consumer.
Reference: Consumer Credit Protection Act and Fair Debt Collection Practices Act See 15 U.S.C. 1601 et seq.