Fair Debt Collection Practices Act

As if carrying and paying off debt in a timely manner weren’t enough of a challenge, there’s little disputing that things get worse when debt collectors start calling.

It is common for people with delinquent debt to feel a combination of embarrassment and fear, and collection agencies know this all too well. Debt collection agencies pursue unpaid debts on behalf of creditors while utilizing a variety of tactics that include persistent phone calls, menacing letters, and the possibility of lawsuits that can result in wage garnishment or asset seizures.

Given the inherent stress and unpleasantness involved, there are few experiences less appealing than having to deal with debt collectors. However, there is some good news.

The Fair Debt Collection Practices Act (FDCPA) is designed to protect debtors and prevent collection agencies from using deceptive or abusive tactics in their attempts to collect on debts. Let’s take a closer look.

The Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a Federal law that provides consumers valuable protections from potentially predatory practices of collection agencies.

For starters, collection agencies are prohibited from calling your home during inconvenient times (prior to 8am or after 9pm) and from calling your workplace at all – once you have instructed them in writing not to do so.

If you’re represented by an attorney, the FDCPA mandates that debt collectors communicate with the attorney, not you. Debt collectors are also prohibited from speaking with third parties regarding your debt – this includes your employer, family members, neighbors and friends.

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Collection Agency Harassment

In addition to defining boundaries as to when and with who collection agencies can maintain communication, the FDCPA imposes strict restrictions against potentially abusive practices.

For instance, collection agencies are prohibited from calling repeatedly and harassing in attempts to coerce payment, nor can they use profanity or any threats of violence. Additionally, debt collectors cannot call to collect debt without first identifying themselves as collectors. As a general rule, it is a good idea to keep a written record of all communications with debt collectors, including the date, time and substance of all phone conversations.

This way, you’ll be prepared should it become necessary to file a complaint with the Consumer Financial Protection Bureau (CFPB). The most recent report from the CFPB indicates that 81,500 debt collection complaints were filed in 2018.

Rights Granted Under the FDCPA

Under the FDCPA, consumers are granted the right to verify and dispute any debt that a collection agency is pursuing collection against. Within five days of initial contact, a collection agency is legally required to notify a debtor in a written debt validation letter of the right to dispute the debt.

Additionally, the debtor is entitled to verify the debt – to request the name and address of the original creditor, along with the amount owed. Under the FDCPA, the collection agency must provide this information within thirty days of the debtor receiving the initial debt validation letter if it seeks to legally pursue debt repayment. If the collection agency cannot provide this information, it cannot legally continue to call a debtor.

Under the FDCPA, a debtor also maintains the right to dispute a debt within thirty days of being initially informed of it. During those initial thirty days, a collector cannot pursue further collection until the dispute is settled. It is also illegal for collection agencies to threaten to garnish wages if the debtor lives in a state that prohibits wage garnishment.

Other prohibited actions under the FDCPA include that collection agencies cannot threaten to have a debtor arrested, and they cannot threaten to take legal action when they have no intention of following through.

Additional Fair Debt Collection Practices Act Provisions

The FDCPA prohibits debt collectors from using any false or misleading statements in attempts to recover delinquent debts. Debt collectors must be truthful regarding the amount of debt – and whether it is beyond the statute of limitations for the state in which you reside – it could be that you don’t owe anything at all!

They can not exaggerate any legal consequences for non-payment of the debt and they cannot misrepresent themselves as a legal authority. They also cannot seek to solicit more than is owed on a debt by attaching additional fees. They cannot seize or threaten to seize property if a legal judgment has not been issued.

Debt collectors are also prohibited from soliciting post-dated checks in an attempt to coerce payment. If a debt collector breaches any of these rights granted under the FDCPA, be sure to file a complaint with the Consumer Financial Protection Bureau.