FTC fact sheet for collection complaints

Know how you’re protected against illegal collection practices.

The FDCPA is a great piece of legislation for consumers, because it protects your rights against abusive collections practices. However, the law is also huge and really complex. To make it easier for consumers to know their rights, the Federal Trade Commission (FTC) provides consumer guide to understanding the FDCPA. Now, to make it even easier on you, we’ve broken down that guide into this easy-to-reference fact sheet you can find below.

Fact: The FTC was created in 1914 by the Federal Trade Commission Act, as part of a series of anti-trust laws.

Following the financial meltdown of 2009, the federal government created an additional agency dedicated specifically to financial issues. The Consumer Financial Protection Bureau (CFPB) was created to address consumer complaints against unfair, misleading, or abusive financial practices. This new bureau handles the complaints now, but they’ve built up from the foundation already set by the FTC.

The following guidelines can help you determine if you have a case against shady collections practices.

General FDCPA guidelines

The FDCPA applies to all personal debts. This includes:

  • Mortgages
  • Auto loans
  • Credit cards
  • Personal loans
  • Unpaid medical bills

The FDCPA only applies to accounts officially sent to collections. This is typically done after 6 months of failure to pay or make arrangements for payments.

Pop Quiz

How can you tell when you’re talking to a collector?

a) By confirming verbally that the caller is with a collections department.

b) If you’re talking to a rep who doesn’t work directly for the creditor.

c) You won’t know until they send a debt collection validation notice.

d) There’s no way to tell.

Reveal Answer

Some creditors have their own in-house collection departments, so it’s important to confirm verbally at the start of a call whether you’re talking to the creditor’s payment department or a collector.

a) By confirming verbally that the caller is with a collections department.

Return to question

Restrictions on collection call times

The following restrictions apply to when a collection can call you:

  • Collectors can call any day, including holidays, unless you have specifically stated these days are inconvenient and you do not wish to receive any calls.
  • Collectors may call any day from 8:00 AM or 9:00 PM (your local time) unless restrictions are stipulated by the consumer.
  • You have a right to stipulate when you may be contacted; violating these stipulations means the collectors violates the FDCPA. If you wish to restrict call times, this is best done in writing so you have proof of your restriction.

Other call restrictions

Here are also some additional restrictions placed on collection calls:

  • The collector cannot call you at work if they have been told this is prohibited by your employer and could put your employment at risk.
  • The collector cannot contact you if you have retained legal representation to handle your debts. If you hire an attorney, the collector must cease communication with you and go through your attorney instead.
  • The collector cannot contact a third party, such as your boss, co-workers, friends, or family (unless give permission to do so by a court) for any reason other than to confirm your address, home phone number, and where you work. They are prohibited from contacting third parties more than once.
  • A collector cannot contact you if you have provided in writing that you wish to cease communication with the collector. This is effectively you saying you won’t pay, so they are free to pursue legal action, but they cannot call you again.

Restrictions on the collection conversation

Once you’re on the phone with a collector, there are also restrictions on how the conversation can go:

  • The collector cannot use profane or abusive language.
  • They cannot threaten violence or physical harm.
  • They cannot threaten to have you arrested.
  • They cannot declare your home, car, or any other property will be taken or repossessed unless that declaration is supported by legitimate legal grounds.
  • They cannot falsely claim you have committed some crime.
  • They cannot claim that your wages can be garnished unless they are permitted by law to actually take such action.
  • They cannot garnish or claim to garnish most benefits you receive from the federal government, including Social Security benefits, SSI, Veterans’ benefits, Civil Service benefits, Student Assistance, and Military Annuities and Survivors’ benefits.
  • They cannot falsely claim to be represented by attorneys and/or government representatives.
  • They cannot use false company names or represent they are from a credit reporting agency.

Business practice restrictions

And finally, outside of the phone calls, there are a few other things that a collector can’t do when it comes to trying to collect on your debt:

  • The collector cannot add interest, fees, and other charges on top of the debt owed unless these additions are outlined specifically in your original contract.
  • If a collector is collecting on multiple outstanding debts, they must follow your instructions on how the money will be used or distributed amongst the various accounts.
  • A collector cannot report false information to any credit reporting agency.
  • The collector cannot publish your name/address on a “bad debt list” or other type of credit blacklist.
  • They cannot deposit a post-dated check early.
  • Contact you by post card or use any special symbol or graphics on any mailed communication, other than their company logo.