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Understanding fair debt collection FDCPA

Fair Debt Collection Practices Act (FDCPA) » Debt Collection » Fair Debt Collection Practices Act (FDCPA)



Has an aggressive collector made you question whether their behavior is illegal?

With the Fair Debt Collection Practices Act (FDCPA for short), you have protection against unfair debt collection practices.

The FDCPA is a vital piece of legislation that keeps you protected against unfair collections tactics. It helps ensure that while collectors can be aggressive in attempting to collect on an outstanding debt, they can only go so far with that aggression within the boundaries of the law.

Understanding the FDCPA

The Fair Debt Collection Practices Act was originally put into law in 1978 as part of the Consumer Credit Protection Act. It establishes standards of practices for collecting debts once they’ve been sold to a third-party collection agency. This includes all types of debts, including credit cards, car loans, mortgages, and even unpaid medical bills.

It also thoroughly defines the term “debt collector,” which by their definition, means “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”

The following list provides a breakdown of the most essential regulations set in place by the FDCPA:

  • Limits hours when collections can make phone calls. A collector cannot call you at all hours of the day and night. They can only call you between 8:00 AM and 9:00 PM, local time.
  • Gives restrictions to the number of calls that can be placed regarding a debt in a single day.
  • Forbids third-party contact – so a collector is legally prohibited from contacting your employer, co-workers, friends, and family.
  • Prohibits abusive or profane language during conversations, as well as threats of violence or physical harm.
  • Forbids threats of arrest or legal action when no such action can be taken.
  • Prohibits collectors from reporting false or embellished information on a consumer’s credit report.
  • Restricts media communication to prevent embarrassing marks or symbols from being used on mail in an attempt to embarrass or humiliate the consumer.
  • Makes it illegal for collectors to publish consumer names and addresses on “bad debt list” or other types of credit blacklists.
  • Prohibits contact with a consumer who is known to have legal representation and/or a consumer who has lawfully provided written notice they wish to have no communication and refuse to pay.

What does the FDCPA really do?

Of course, if you are currently dealing with collectors, you may be wondering just what benefits the FDCPA actually provides. After all, your collectors are probably calling every day to attempt to collect and using what can seem like every trick in the book to do it.

Unless a collector’s behavior violates one of the restrictions, their practice is considered fair. A creditor can absolutely call you every day, but they cannot call you forty times in one day. They can even threaten, but those threats have to fall within the limits of the law. So if the company is seeking a court order against you, they can tell you that… as long as it’s true.

An important aspect of the FDCPA to keep in mind is the validation of debt. According to these rules, debt collectors have to either tell you certain information about the debt or send it to you within 5 days of their initial communications. The required information includes the amount of debt, the name of the creditor you owe it to, and statements that say:

  • Unless you dispute the debt within 30 days of receiving this information, the collector will assume the debt is a valid debt.
  • If you write to the collector within 30 days of disputing a debt, the collector will obtain and send to you the verification or copy of judgment concerning the debt.
  • If you write a request to the collector within 30 days of dispute, the debt collector will send you the name and address of the consumer’s original creditor (if it’s different than the current collector).

How is the FDCPA enforced?

In most cases, administrative enforcement of these rules is delegated to the Federal Trade Commission (FTC). However, if you are facing unfair debt collection practices, you should report it at these 3 places:

With the FDCPA, timing is everything

For the FDCPA to apply, you have to be dealing with a collector.

What does that mean? Typically, that the debt is at least 6 months past due and charged off by the original creditor.

Making a late payment will not send the account into collections. When the account sends debt to a third-party collection office, the collector’s practice is regulated by the FDCPA. That typically happens after six to nine months of nonpayment.

The FDCPA does not regulate attempts to receive payments. Additionally, if you get any form of legal representation for something like bankruptcy, contacting you is prohibited. They must go through your attorney.

Consumer rights to know about debt collection

Just as there are many reputable collection agencies and billing departments, there are also bill collectors out there that skirt the law, misrepresent your debt or use harassment to collect.

Fortunately, the Fair Debt Collection Practices Act (FDCPA)  restricts what debt collectors are allowed to do when trying to collect certain types of debt. That’s why you need to know your rights as a consumer when it comes to unfair debt collection practices. Here are some examples from the list of essential regulations mentioned above

1. Engage in harassment

Bill collectors that call you repeatedly at inconvenient times to “annoy, abuse or harass” you are violating the law. “The Fair Debt Collection Practices Act (FDCPA) says debt collectors can’t harass, oppress, or abuse you or anyone else they contact,” according to the Consumer Finance Protection Bureau (CFPB).

Examples of harassment by debt collectors include using profane or obscene language, threatening violence or harm, not identifying who they are when calling to collect a debt. Debt collectors aren’t allowed to call you before 8 a.m. or after 9 p.m. or at work without your permission.

2. Misrepresent the debt

The FDCPA prohibits debt collectors from misrepresenting the character, amount or legal status of any  debt. If you think a debt collector is misrepresenting a debt it’s trying to collect, the Federal Trade Commission (FTC) recommends reporting the business to your state attorney general, the FTC or the Consumer Protection Financial Bureau.

3. Pretend to be an attorney

If a person attempting to collect a debt falsely claims that he or she is an attorney, that’s against the law. The same goes for a debt collection agency or other entity that represents or implies that any communication is from an attorney.

4. Threaten actions that can’t be legally taken

Some bill collectors may try to scare you by falsely claiming they can have you arrested or imprisoned. Or they may threaten to garnish your wages or seize property.

It’s true that a debt collector may be able to garnish your wages, but first it must obtain a court order to take money from your paycheck. A debt collector must also get a court order to take money from your bank account or seize unsecured property that isn’t claimed as collateral.

5. Try to collect a time-barred debt

According to the FDCPA, debt collectors can’t collect on debts that extend beyond the state statute of limitations. The length of a debt’s statute of limitations varies by the state (or the state specified in your credit contract) and type of debt.

Always check whether an old debt someone is trying to collect is still legally collectable. Never make a payment or acknowledge the debt in writing until you know it’s within the statute of limitations, since in some states, those actions can start the statute of limitations on the debt again.

6. Mention your debt to a third party without permission

If a debt collection agency calls your boss, your cousin,  your three ex-wives without, or any family member without your consent to collect a debt, it’s breaking the law.

Generally, unless you give a debt collector permission to talk to someone other than yourself or your attorney, the debt collector can only communicate about your debt with the creditor, the creditor’s attorney or a consumer reporting agency.

The bottom line

Whether you’re getting bothered about your credit card debt or won’t stop getting calls about that unpaid medical bill, dealing with debt collectors is never fun. The FDCPA is there to protect you, so make sure you know your rights – and don’t be afraid to report harassment. You even have the right to sue if the collector has broken any of the rules.

Important FDCPA updates

In May 2019, the Consumer Financial Protection Bureau (CFPB) sent out news of proposed updates to the FDCPA. The main rules proposed include:

  • Collectors can only attempt to call a consumer 7 times in 1 week. If they have a conversation with the consumer, they must wait a week before calling again.
  • Collectors can contact consumers with newer technologies such as email or text message. However, they must include instructions on how to opt out of such communications.
  • Consumers have the power to restrict the types of media through which collectors can reach out to them
  • A “limited-content message” is a new term that describes how much information a collector can leave in a voicemail message without it being considered a communication under the FDCPA rules.

When the CFPB announced this proposal[1] they touted it as a step forward in protecting consumer rights, while bringing the FDCPA up-to-date with modern technology. They specifically pointed to the clarification that limited the number of calls per week, which had been left previously undefined.

However, some consumer advocates warn that the rules for the use of email and text are too vague and leave consumers open to increased harassment.[2]They say it might allow collectors to get around previously set rules, such as collectors not being able to contact you at work. For instance, under the new rules, you may receive an unlimited number of text messages while you are at work, until you opt-out.

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