Fair Debt Collection Practices Act
The FDCPA is a collection of laws enacted by the Federal
Trade Commission to govern the actions of Collection Agencies
It is the purpose of this act to eliminate abusive practices by debt collectors. Like the Fair Credit Reporting Act (FCRA which was discussed earlier) governs credit bureaus and the companies that report to it… this act is specifically for the bill collectors. You can obtain a full copy of both by contacting the Federal Trade Commission (FTC)
These laws cover third party debt collectors and not the original creditors. For Example: You defaulted on a $500 Sears card and Sears has sent it to ABC Collection Agency who is now calling you everyday. ABC is considered a third party and the FDCPA directly covers their actions. The penalties for violations can be severe and can be imposed for each individual occurrence of a violation. So if ABC violated the same thing 5 times in one day then that is potentially 5 separate charges. Sears is the original creditor and not coverage by the FDCPA… however many creditors do not know this which could be used to your advantage.
One thing that is for certain collection agencies definitely know about the FDCPA and it is a constant concern in everything they do. When you let them know that you have some knowledge of the FDCPA you will definitely get there attention!
A debt collector, collection agency can not add additional collection fees to your debt. The only amounts they can add is interest, and that is only according to the terms of the original contract agreement
The following are excerpts of the main provisions of these laws that will be of special interest to you if you are currently getting calls from bill collectors.
A debt collector CAN NOT communicate with another person about your debt. They cannot tell your employer that you owe a debt, they cannot tell your parent's that you owe a debt. They cannot divulge that type of information to ANYONE other than YOU! However they can contact your employer, friends or family ONLY to try and obtain current contact information for you and that is IT! They can say they’re trying to locate you “regarding a business matter” which nowadays most people knows what that means. But that is all they can say.
A debt collector cannot call you before 8 am or after 9 pm… your time.
If you have told a debt collector on the phone that they cannot call you at work any more, THEY HAVE TO STOP! If they continue to call you at work after you have requested they stop, it is illegal and a violation of the FDCPA and the debt collector can be sued in court.
Again, the debt collector cannot talk to anyone other than you regarding your debt. The exception is the credit bureau, your attorney, or anyone you designate as your representative in the matter, or their attorney.
You can request a Cease & Desist of all communication from a debt collector if that request is made IN WRITING! If you do this, they can not even call you at home any more. They can only contact you one time after the Cease & Desist and that is to inform you of what they intend to do regarding the matter.
A debt collector may not engage in any conduct where the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt? Without limiting the general application of the foregoing, the following conduct is a violation of this section:
1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)1 of this Act.
(4) The advertisement for sale of any debt to coerce payment of the debt.
(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
(6) Except as provided in section 804, the placement of telephone calls without meaningful disclosure of the caller's identity.
A debt collector cannot tell you that they have received a judgment against you UNLESS they actually have. They cannot tell you that you owe more than you actually do and they cannot charge you fees for collecting the debt!
The debt collector cannot threaten you by saying that they are going to take over and sell your home or furnishings unless they legally can.
A Collection Agency or debt collector CANNOT send you collection notices by postcard and they cannot send you notices in envelopes which contain the words COLLECTION or DEBT on them. This is a violation of privacy.
When you receive initial phone call from a debt collector, they MUST send you a notice in writing within 5 days of that phone call. They must also include the amount of the debt, the name of the creditor to whom the debt is owed and a statement that states you have 30 days to dispute the validity of the debt.
Once you request validation of a debt the debt collector must CEASE and DESIST all collection efforts until they can provide complete validation of the account. They cannot call you, write you or report the account to the credit bureau until they provide validation. If they do, you can take them to court for violations of the FCDPA. If the debt collector does not ever provide validation, they cannot EVER collect on the debt legally again. Just because you do not request validation or dispute the validity of the debt within the 30 days outlined by the debt collector or CA in their letters, it does NOT mean that you are admitting you owe the debt!
These laws are intended to stop the over-the-top and outrageous actions by some collection agencies. Most collection agencies do not engage in such practices. Knowledge of these laws will allow you to stop the calls and contacts from a collection agency.