Fair Debt Collection Practices Act

Although a creditor can use numerous ways to collect a debt outstanding, if they seek help from debt collectors, then the debt collectors must conform to the ethical guidelines established in the FDCPA.

In 1978, Congress enacted the Fair Debt Collection Practices Act (FDCPA) especially after the abundant evidence of the use of unfair, abusive and deceptive debt collection practices that several debt collectors relied on. Congress found out that abusive practices for debt collection were directly linked with issues like:

  • The amount of personal bankruptcies filed
  • Marital instability
  • Job loss
  • Invasion of individual’s privacy

Put simply, The FDCPA is a federal law that largely limits the actions and behavior of 3rd party debt collectors who attempt to collect debts on behalf of the creditors. Though amended in 2010, the FDCPA restricts the means and methods that collectors can use to contact debtors and the time of the day and the number of times contact can be made.

Here it is important to note that the FDCPA applies when the 3rd party debt collector is hired for personal debt collection such as auto loans, medical bills, credit card accounts and home loans as opposed. It doesn’t apply when a collector is hired to collect a business debt. Therefore, a good understanding of the law is important to help you protect your rights. Here are is some crucial information about FDCPA from our experienced lawyers.

What is the Fair Debt Collection Practices Act (FDCPA)?

As mentioned above the FDCPA doesn’t protect debtors from those who are reaching out for personal debt collection. For example, if you happen to owe money to a local hardware owner and they call you to collect the debt, then that person is not a debt collector under the acts terms.

The Fair Debt Collection Practices Act only applies to 3rd party debt collectors like those who work for a debt collection agency. The law covered the following debts:

  • Credit card debt
  • Medical bills
  • Student loans
  • Mortgages
  • Household debt

When and How Can the Debt Collector Contact You?

When your creditor uses a 3rd party for debt collection, that debt collector must obligate to the rules laid down under the FDCPA regardless of whether that third party is a lawyer. Thus, here are the many things that a debt collector can’t do.

Debtor collectors can’t:

  • Call you, the debtor, before 8am in the morning and after 9 pm at night based on your time zone
  • Call you during work hours especially when the debt collector is aware that your employer does not allow and approve of phone calls at work
  • Oppress, abuse or harass you at any time
  • Put false allegations on you or lie to you that you’ve committed a crime
  • Use unfair means in an attempt to collect debt
  • Hide their identity on the phone
  • Reject a request written by you to cease contact

Let’s take a look at some examples to understand them better. For example FDCPA violations specify that debt collectors can’t contact debtors at inconvenient times. However, if the collector and the debtor have agreed and made an arrangement to call after the hours permitted. Therefore, if a debtor requests the collector that they’d talk after work or after 10pm then in such a situation the collector will be allowed to call and that won’t be considered as violation of law.

Likewise, the FDCPA allows debt collectors to contact debtors at their office or home but they may not be allowed if the debtor informs the debt collector to stop contacting them at work either in writing or verbally in such a situation, the debt collector mustn’t call that number again.

Also, within five days after contacting a debtor, the debt collector is allowed under FDCPA to send a written validation notice that includes:

  • How much the money is owed
  • The creditor’s name that the debt is owed to
  • What needs to be done if the debt is not yours

Communication Guidelines for Debt Collectors under the FDCPA

Can’t give out information to others

The debt collector is forbidden under the act from giving out information that pertains to your debt to any other person.

Keep their identity hidden from others except for the debtor

Moreover, debt collectors are strictly prohibited to communicate information about your debt accounts via postcard or use any kind of language or symbol on the envelope that shows that they are a debt collector.

Interact with the lawyer if and when hired by the debtor

Also, once you hire a lawyer and the debt collector is informed about it, then the debt collector shouldn’t reach out to you directly. They must contact and communicate with your lawyer.

No Harassment

As per the Fair Debt Collection Practices Act, debt collectors are not allowed under any circumstance to use abuse or harass when they attempt to collect debt from you. Therefore, they can’t threaten violence against your property, you or your reputation. Additionally, they can’t use profanities or obscene language on call or in person or via mail.

Besides this, collectors or their agencies are also prohibited to publish any type of consumer listings that haven’t paid debts, except to a consumer bureau.

False Statements or Misrepresentation

By law, the debt collectors are prohibited from lying to collect a debt. This includes falsely identifying them as credit reporting agency or government representatives and lawyers and stating that the debtor has committed a crime. Furthermore, debt collectors cannot pretend to be someone else like impersonating a police officer. That is just illegal in several jurisdiction. They can’t threaten the debtor with actions that they can’t take legally or threaten them to sue you if the statute of limitation has passed.

They can’t carry wage garnishment

Without a court order, debt collectors are not allowed legally to garnish wages and bank accounts. However, if the court orders wage garnishment then only such a judgment can direct an employer or a bank to turn their funds and wages over for debt payments.

But even then many federal benefits are exempt from garnishment such as:

  • Student assistance
  • Military annuities
  • Social security

How Should a Collector Prove the debt is Due?

As per the rules of the Fair Debt Collection Practices Act, the collectors of debt should provide all the details about each and every debt that they are attempting to collect. This is done by sending a notice in writing with the following information:

  • Creditor’s name
  • The amount owned
  • Instructions on how to make debt repayments

In technical terms, this is known as the validation notice. Also, under the rules of the FDCPA, this notice must be delivered to the debtor within 5 days of the initial contact.

After that, the debtor gets 30 days to return back to the collector in person or by letter and give them the reasons if you don’t owe them the debt or the amount is incorrect.

It is important that the debt collector provide complete details because sometimes a debtor tends to owe money to numerous creditors or sometimes a lot of debts to a single creditor. And besides this, debts can be resold multiple times therefore the name of the creditor might change even though it is the same debt.

Hence, if the debt is yours and you have paid it already, then be sure to attach a copy of the bank statement or the cancelled check. This is much needed because if you want to content the debt amount this will provide you with all the information about the payments that you have made including fees or interest charged or waived.

Another case scenario can be that if the debt happens to stem from identity theft, then make sure to include the copy of the identity theft. And you must respond to the debtor collector within 30 days and dispute the debt otherwise it shall be assumed as valid.

Since all this can be tricky and complicated, it is best if you work with us. At Shiner Law Group, we specialize in this domain. We can deal with the debt collectors on your behalf and make sure that all your rights are protected. Our goal is to help debtors smoothly pay off their debts without being harassed, abused or mistreated by debt collectors. Contact us today.

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