The Fair Debt Collection Practices Act: Know Your Rights

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The Fair Debt Collection Practices Act (FDCPA) serves as a cornerstone in federal consumer protection legislation, designed to shield consumers from abusive and unfair debt collection practices. Enacted in 1978, this law sets strict guidelines for debt collectors, ensuring that the process of debt collection is conducted with respect and fairness, without compromising the dignity and privacy of individuals.

Understanding the FDCPA is crucial for anyone facing debt collection, as it not only outlines what collectors can and cannot do but also empowers consumers with rights to challenge and verify debt claims. This guide aims to demystify the FDCPA, offering a clear overview of its protections and how it affects the interaction between debtors and collectors.

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The purpose of the FDCPA

The Fair Debt Collection Practices Act FDCPA was passed after Congress concluded that there were many "abusive, deceptive, and unfair debt collection practices."

These abusive practices while collecting debts contributed to personal bankruptcies, marital instability, job loss, and invasion of privacy.

Because existing laws were inadequate, the law codified behaviors permissible by debt collectors.

And, because debt collection and debt collection agencies can cross state lines, it requires regulation on a federal level. In this way, all citizens have equal protection, and interstate commerce is unaffected.

Overview of the rights and protections provided by the FDCPA

The short version of the Fair Debt Collection Practices Act FDCPA is that debt collectors must be honest about who they are, what they are collecting, and how they treat you.

As a debtor, you have rights to privacy, validation, and safety from threats. In exchange, you must respond within specified time frames and update the debt collector with new addresses or phone numbers.

Who Does the FDCPA Apply To?

The Fair Debt Collection Practices Act defines a debt collector as "any person who regularly collects, or attempts to collect, consumer debts for another person or institution or uses some name other than its own when collecting its own consumer debts." This includes third-party debt collectors who buy debt from creditors or other debt collectors.

The Fair Debt Collection Practices Act does not define a debt collector if they:

• Only collect debts in isolated instances
• Collect their own debts (original creditor)
• Attempt to collect debts they originated and then sold but continue to service (for example, mortgage and student loans)
• Are legal process servers

Types of entities covered by the FDCPA

Taking out all the formal language, a debt collector can be a debt collection agency, debt buyer, or lawyer who regularly collects debts owed. Not all debts are recognized by the Fair Debt Collection Practices Act. Recognized debts include:

• Mortgages
• Credit card debt
• Medical debts
• Other personal, family, or household debts

Exceptions to the FDCPA

Original creditors and their in-house collections are not covered by the Fair Debt Collection Practices Act. They may be covered under a state's individual Fair Collections Act. Not all states have state laws to protect debtors. Some debts owed are not recognized. These debts can include:

• Business debts
• Debts not in default when they were purchased (not past due debts)
• Debts obtained as security
• Debts held in an institution’s trust department or mortgage loan escrow for taxes and insurance

Non Prohibited Collection Practices

The following are non-permissible behaviors under the Fair Debt Collection Practices Act, with notes if there are exceptions. A debt collector may not:

• Contact you between 9 pm and 8 am - unless the consumer wishes them to call between those hours
• Contact the consumer at the place of employment if the collector believes the employer prohibits such communications
• Contact you after you hire an attorney to handle your case - you must provide your attorney's name, address, and phone number. If your attorney is not responsive, the debt collector can contact you.
• Continue collection after a consumer's written request to stop - this won't stop the collection and might escalate it to a court case. Always send the letter with the signature required
• Harass, oppress, or abuse you - generally can include threats of harm or public embarrassment. Calling is not harassment if the calls do not violate the law
• Contact people other than you, your attorney, credit bureau as allowed by state law, creditor, creditor’s attorney, and debt collector’s attorney. If you fail to provide your current address and phone number to the debt collector, they can contact your employer or family
• Call your cell phone without permission. Social media is a gray area, as it has become widespread after the most recent amendments.

Prohibited Practices Harassing or Abusive Practices

A debt collector cannot:

• Oppress, abuse, or harass debtors
• Use or threaten to use violence or other criminal means to cause bodily harm, reputation, or property damage
• Use obscene, profane, or other abusive languages
• Publish a list of debtors who allegedly refuse to pay debts - the debt collector can furnish accurate information to credit bureaus
• Advertise a debt for sale to coerce payment
• Annoy, abuse, or harass persons by repeatedly calling their telephone numbers or allowing their telephones to ring continually
• Fail to properly identify oneself, except as allowed to obtain location information - defined above

False or Misleading Representations

A debt collector cannot:

• Use any false, deceptive, or misleading representation
• Falsely represent or imply that he or she is a federal or state employee or contractor
• Misrepresent, miscalculate, or inflate the debt amount - they must be able to show what you owe as it was purchased from the original creditor or as assigned by the original creditor.
• Falsely represent or imply that he or she is an attorney or send communications that appear to come from an attorney.
• Threaten a lawsuit unless they intend to follow through - they must then send you a demand letter

Unfair Practices

A debt collector can not use:

• Use unfair or unconscionable means to collect or attempt to collect a debt
• Collect any interest, fee, charge, or expense in addition to the principal unless authorized by the original debt agreement or permitted by law
• Accept postdated checks by more than five days
• Solicit a postdated check to use as a threat or to institute criminal prosecution
• Deposit or threaten to deposit a postdated check before the check date
• Make collect telephone calls and telegrams
• Take or threaten to repossess property when there is no enforceable right to the property or they do not intend to do so
• Use a postcard to contact a consumer about a debt.

Multiple Debts

If the debt collector handles several debts by the same person, payment must be applied as the debtor dictates.

Legal Actions by Debt Collectors

A debt collector may:

• File a lawsuit to enforce a security interest in real property in the judicial district in which the real property is located (place a lien on your house or car)
• Other actions may be brought only in the judicial district in which the consumer lives or in which the original contract creating the debt was signed

Furnishing Certain Deceptive Forms

A debt collector can not use documents that mimic or appear to have come from a federal agency or credit bureau.

Your Rights Under the FDCPA

Right to validation

If you are contracted by a debt collector, you have the right to have the debt validated. This means that you should get a notification of the debt in writing. This includes the original creditor's name, the original amount, and any other information the debt collector has. Do not pay a debt that does not come with a written notification. You then have thirty days to dispute the debt.

Right to dispute the debt

If there is an issue with the debt, you can dispute it in writing within 30 days. In response, the debt collector must mail you the requested information and stop collection efforts until the dispute is resolved. Keep everything in writing and make copies of the original documents if you need to mail proof. DO NOT send the originals.

Debt collectors must:

• Mail you the amount of the debt, name of the creditor, notice that the consumer has 30 days to dispute the debt, notice that you can request in writing a verification of the debt or judgment, and notice that within the 30-days, the consumer makes a written request for original creditor name and address, if different from the current creditor
• Stop collection efforts if, within the 30-day period, the debtor disputes in writing any portion of the debt or requests the name and address of the original creditor until a letter is sent with the requested information

Right to cease communication

You can request in writing that a debt collector stop contacting you. You can also hire a law firm to handle the debt collector, but the debt collector can recontact you if the lawyer is unresponsive. Stopping contact might be a huge relief, but it can escalate the situation, and you could end up in court.

Right to sue for violations

The FDCPA allows the debtor to sue in state or federal court the debt collector who violates any provision of the FDCPA. If you can prove the violations, you may be able to collect the following:

• Any actual damages sustained as a result of the violation
• Punitive damages, as allowed by the court
• in an individual action, up to $1,000
• in a class action, up to $1,000 for each named plaintiff and an award divided among all members of the class up to $500,000 or 1 percent of the debt collector’s net worth, whichever is less
• Costs and reasonable legal fees

What to Do If Your Rights Have Been Violated

If your rights have been violated, gather together the following information:

• What happened, including key details and documents
• What do you think would be a fair resolution
• What you’ve done to try and resolve it

You then have a few different options, including reporting the behavior to two federal agencies.

Reporting violations to the Federal Trade Commission (FTC)

If you witness violations of the FDCPA, you can report them to the Federal Trade Commission FTC. This federal government agency will investigate and can levy penalties against the debt collector. The form is available at ReportFraud.ftc.gov.

Filing a complaint with the Consumer Financial Protection Bureau (CFPB)

File a report with CFPB at consumerfinance.gov/complaint or by calling (855) 411-CFPB (2372), toll-free, 8 a.m. to 8 p.m. ET, Monday through Friday. Like the FTC, the CFPB will investigate.

Taking legal action against a third-party debt collector

If you have clear proof that a debt collector violates the law, you may want to contact a lawyer specializing in the FDCPA.

Keep names, dates, and details of the contacts with debt collectors in writing, and keep copies of all written communications between you and the debt collector.

Do not be rude, lie, or be profane to debt collectors. It will not play well in court. Get a FREE consultation today on reducing your debt.

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