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An Overview of the Fair Debt Collection Practices Act
(U.S.)
The U.S. Fair Debt Collection Practices Act
requires that debt collectors treat Debtors fairly by prohibiting certain
methods of debt collection.
What debts are covered?
Personal, family, and household debts are covered under the Act, which
includes money owed for the purchase of an automobile, medical care, or
for charge accounts.
Who is a debt collector?
A debt collector
is any person, other than the creditor, who regularly collects debts owed to
others. Under a 1986 amendment to the Fair Debt Collection Practices Act,
this also includes attorneys who collect debts on a regular
basis.
How may a debt
collector contact a Debtor?
A collector may
contact a debtor in person, by mail, telephone, telegram, or facsimile. A
debt collector may not contact a Debtor at unreasonable times (before 8 a.m. or after 9 p.m.)
or places (at work if the collector knows that the Debtor’s
employer disapproves) ,unless they agree.
Can
a debtor stop a debt collector from contacting them?
Yes they can stop a collector from contacting them by writing a letter to
the collection agency telling them to stop. Once the agency receives the
letter, they may not contact the debtor again except to say there will be no
further contact. The agency may notify the debtor if the debt collector or
the creditor intends to take some specific action.
Can debt collector contact anyone else?
If the debtor
has an attorney, the debt collector may not contact anyone other than their
attorney. If they do not have an attorney, a collector may contact
other people, but only to find out where the debtor lives and works.
Collectors usually are prohibited from contacting such permissible third
parties more than once. Inmost cases, the collector may not tell anyone
other than the Debtor and their attorney that the Debtor owes
money.
What must the debt
collector tell the debtor?
Within five days
after the debtor is first contacted, the collector must send them a written
notice telling them the amount of money they owe; the name of the creditor to
whom the debtor owes the money; and what action to take if the debtor
believes they do not owe the money.
May a debt collector continue to make contact if the debtor
believes they do not owe money?
A collector may
not contact a debtor if, within 30 days after the debtor is first contacted,
the debtor sends the collection agency a letter stating they do not owe
money. However, a collector can renew collection activities if the debtor
is sent proof of the debt, such as a copy of a bill for the amount
owed.
What types of debt
collection practices are prohibited?
1. Debt
collectors may not harass, oppress, or abuse anyone. For
example, debt
collectors may not:
- use threats of violence or harm against the person, property,
or reputation;
- publish a list of consumers who refuse to pay their debts (except to
a credit bureau);
- use obscene or profane language;
- repeatedly use the telephone to annoy someone;
- telephone people without identifying themselves;
- advertise a debtor’s debt.
2. Debt collectors may not use any false statements
when
collecting a debt. Debt collectors may not:
- falsely imply that they are attorneys or government representatives;
- falsely imply that a debtor has committed a crime;
- falsely represent that they operate or work for a credit bureau;
- misrepresent the amount of a debtor’s debt;
- misrepresent the involvement of an attorney in collecting a debt;
- indicate that papers being sent to a debtor are legal forms when they
are not;
- indicate that papers being sent to a debtor are not legal forms when
they are.
3. Debt collectors also may not state that:
- a debtor will be arrested if they do not pay their debt;
- they will seize, garnish, attach, or sell a debtor’s property or
wages, unless the collection agency or creditor intends to do so, and it is
legal to do so;
- actions, such as a lawsuit, will be taken against a debtor, which
legally may not be taken, or which they do not intend to take. Debt
collectors may not:
- give false credit information about a debtor to anyone;
- send a debtor anything that looks like an official document from a court
or government agency when it is not;
- use a false name.
4. Debt collectors may not engage in unfair practices when
they
try to collect a debt. For example, collectors may not:
- collect any amount greater than the actual debt, unless allowed by law;
- deposit a post-dated check prematurely;
- make a debtor accept collect calls or pay for telegrams;
- take or threaten to take a debtor’s property unless this can be
done legally;
- contact a debtor by postcard.
What control does
a debtor have over payment of debts?
If a debtor owes
more than one debt, any payment they make must be applied to the debt they
indicate. A debt collector may not apply a payment to any debt a debtor
believes they do not owe.
What can a debtor do if a
debt
collector violated the law?
A debtor has the right to sue a collector in a
state or federal court ( U.S.) within one year from the date they believe the
law was violated. If they win, they may recover money for the damages they
suffered. Court costs and attorneys fees
also can be recovered. A group of
people also may sue a debt collector and recover money for damages up to
$500,000, or one percent of the collectors net worth, whichever is
less.
End of
Fair Debt Collection Practices Act.
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