Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) protects consumers against abusive and unfair collection practices. Be sure you know your rights and what to do if you think a debt collector has broken the law.

The FDCPA was enacted by Congress in 1977 to stop the negative actions taken by some collection agencies such as threats, deception and harassment. The Act also provides a process which must be followed by the collection agency during the debt collection process.

Not everyone who collects debts is covered under the Act. THE FDCPA defines a debt collector as anyone who collects debts as a regular part of their business. This includes:

• Employees of debt collection agencies
• Lawyers who collect debts
• Companies that purchase outstanding debts from creditors and then try to collect the debt from the consumer.

The Act does not cover in-house collection departments such as the credit or collection department in a retail store or the collection department for a credit card issuer such as a gas or airline company. The Act also does not cover the in-house collection activities of the credit card, loan or mortgage departments of banks.

The Fair Debt Collection Practices Act covers the collection activities of debt collectors for all personal debts such as credit card debt, medical bills, car loans or home mortgages.

The Act was designed to protect consumers by giving them the right to:

• Be protected against harassment from a debt collector
• Have their debt information held confidentially and only released to authorized individuals
• Not be contacted during inconvenient times
• Seek proof from the collector that they actually owe the debt
• Sue a debt collector who violates the FDCPA

One of the key parts of the Act is the notification process which must be followed by debt collectors and consumers during the debt collection process.

• Initial Notification to Consumer - A debt collector must contact the consumer and provide them with the following information:
  • Name of the creditor
  • Amount of the debt
  • Information about the right for consumers to ask for proof of the debt
  • Information on how to dispute the debt in writing within thirty days

The first contact from the collector can be by phone; however, they must follow-up that call with a written "Validation Notice" within five days.

• Follow-up Communication from Consumer – The consumer has thirty days after they receive the "Validation Notice" to send a letter to the collector to deny that they owe the debt, to ask for proof of the debt or to tell the collector to stop contacting them.

Consumers are protected under the Act from abusive or unauthorized actions by debt collectors including:

• Harassment – Debt collectors cannot continually use the phone to annoy the consumer. They cannot threaten harm or violence.
• Misrepresentation of the facts – The Act prohibits debt collectors from lying or making claims to the consumer or to anyone else in order to collect the debt. The collector cannot impersonate a lawyer, law officer or credit reporting agency.
• Threats – The consumer cannot be told they will be arrested, or their property or wages will be seized if they don't pay the debt. The collector cannot threaten to take legal action unless they legally can, and are planning to, take the action.
• Verbal abuse – The collector cannot use obscene or profane language.
• Unauthorized contact of other people – The collector can contact other people to find out how to contact the debtor; however, they cannot discuss the debt with anyone other than the debtor, their spouse or their attorney unless they have been given specific permission by the debtor to have those discussions.
• Actions that affect privacy – The Act provides privacy for the debtor. The collector cannot produce lists of consumers who owe debts. When sending written notifications to the consumer, the envelope cannot identify the sender as a debt collector. They cannot discuss a consumer's debt on a postcard.
• Contact at inconvenient times – They cannot call consumers before 8 a.m. or after 9 p.m.
• Contact at work – They cannot call consumers at work if the collector has been told that the consumer cannot take calls at work.

You can control how you deal with a collection agency. The Act provides the consumer with the ability to tailor the type of calls they received from a debt collector. For example, the consumer can:

• Tell the collector to stop all phone calls
• Request communication only be in writing (no phone calls)
• Tell the collector to contact their attorney about all issues
• Totally stop all communication from the collector. If the consumer tells the collector to stop all communication, the collector can only contact the consumer if they want to inform the consumer that:
  • There will be no further contact or
  • The creditor or the collector plans to take a specific action, such as file a lawsuit

The consumer just needs to send a letter to the collector detailing the consumer's communication preferences. The letter should sent by certified mail with a return receipt requested. This will give the consumer the information they will need to prove that they sent the letter and that the letter was delivered to the collector.

You have the right to report any violations of the FDCPA to:

• The Federal Trade Commission (FTC) through their hotline at 877-FTC-HELP or on the FTC website
• Your state's attorney general. They can help you understand your rights under the laws of your particular state.

You can also sue a collector in a state or federal court during the year following the violation of the Act. The debt which is owed does not go away just because you sue the collector – even if you win your suit.

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