Fair Debt Collections Act

An Introduction to the Federal Fair Debt Collection Practices Act

If you have ever known someone who has struggled with debt, you may be familiar with stories of rude, upsetting or even downright offensive debt-collector behavior. But, even though many consumers are not aware of it, there are legal limits on what creditors can do to collect payment. Knowing the basics about your rights during the debt-collection process is imperative to avoid creditor harassment. A debt collector restricted by the FDCPA is someone in the regular practice of collecting money owed to others; for example, collection agencies, certain lawyers and firms that purchase unpaid debts are all subject to the provisions of the FDCPA. The FDCPA applies to most types of consumer debts. "[P]ersonal, family, and household debts" like mortgages, car loans, medical bills, or credit-card balances are all covered. The FDCPA does not apply to business debts, however. Within five days of contacting you, a debt collector is required under the FDCPA to provide a written notice that contains the amount you owe, the name of the creditor and instructions detailing the proper procedure for disputing the debt. If you wish to dispute the debt and do so in writing within 30 days, the debt collector must cease collection efforts until it can provide you with written verification of the debt. In addition to informational requirements, the FDCPA prohibits a number of behaviors that could amount to creditor harassment . For instance, a debt collector cannot call repeatedly or before 8 a.m. or after 9 p.m., threaten action the collector does not intend to take, use offensive language, make any false statement or commence with collection efforts after you have made a written cease-communication request. If you are facing debt-collection efforts, contact an attorney today to explore your options. Once you are represented by a lawyer, debt collectors are only allowed to contact you through your attorney. Furthermore, your legal representative can sue for creditor harassment if you have been treated unfairly in the collection process and may be able to collect monetary damages.

Understanding the Fair Debt Collection Practices Act | Finance ...

Article by Kathy Burns-Millyard

Debt is a serious and often restrictive part of everyone’s lives. And with debt, it can sometimes seem like everyone is out to get you. Some creditors want your money and other creditors want your debt. It is a cycle that many people have difficulty getting out of.

Luckily, the Fair Debt Collection Practices Act is out there to protect us. The Act is a statute of the Consumer Credit Protection Act and it exists to eliminate abusive practices relating to debt collection in the finance industry and to provide people with a way to protest or dispute different issues. The Act defines the way in which debt collectors may do business, the rights of consumers and the penalties of violating the Act.

Some things you should know about the Act are:

1. Many collection agencies will define their organization as one other than a debt collector to avoid the Act. However, the Act very broadly defines a debt collector as anyone who collects debts or attempts to collects debts in any way.

2. The Act only pertains to third-party debt collectors. However, some states have consumer protection laws which regulate original creditors as well.

3. The Act only pertains to personal and non-commercial transactions, not business transactions.

To protect yourself, review the following information regarding what debt collectors may not do when attempting to collect a debt (this behavior is deemed as either abusive or deceptive):

- Telephoning you before 8 a.m. or after 9 p.m.

- Contacting you after receiving written notice that you wish no further contact or refuse to pay the amount (Note: the collector may contact you to indicate collection efforts are being terminated or for litigation purposes)

- Contacting you at work, especially if you have specifically requested that they do not

- Misrepresenting themselves to gain access to you

- Misrepresenting the debt

- Publishing your name or address on a bad debt list

- Threatening you with arrest or legal action

- Swearing at you or using abusive language

- Discussing the nature of your debt with others

- Recording false information in a credit report or threatening to do so

About the Author

© 2006, Kathy Burns-Millyard. Read more about the Fair Debt Collection Practices Act at FinancialTrap.

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