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Fair Debt Collection Practices Act (FDCPA): Know Your Rights

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Receiving a call from a debt collector can be unsettling. At best, the caller may work for the agency you owe money to and will want to talk about repayment. In worst-case scenarios, an unscrupulous third-party debt collector may tell you – illegally – that if you don’t pay the money back, you will be arrested.

Consumers are often unprepared for these calls and may not know how to handle encounters with debt collectors, who can be overly aggressive, threatening and pressuring to repay the debt, or trying to coerce consumers into giving them personal information.

“My advice is to hang up,” said Larry Silverman, a consumer law attorney with Southeast Consumer Law in Atlanta. “It’s very simple. There’s no such thing as a positive experience with a debt collector.”

Instead, consumer advocates advise corresponding with debt collectors in writing, following specific steps that can stop the calls and while you make decisions about how to handle the debt. Federal and state laws, including the Fair Debt Collection Practices Act (FDCPA), offer consumers protections against third-party debt collectors when their attempts to contact you start to feel like harassment.

Table of contents

What is the Fair Debt Collection Practices Act?
How the FDCPA protects consumers
What does the FDCPA cover?
What does the FDCPA not cover?
CFPB proposes new regulations for the FDCPA
What to do when a debt collector calls
What not to do when a debt collector calls

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act is a federal law that was designed to counter what it describes as “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices.” Enacted in 1978, the FDCPA notes that abusive debt collection practices, which can include repeated calls to a consumer’s home, workplace, and friends, have contributed to job loss, marital instability, and personal bankruptcies.

The law applies to third-party debt collectors, or agencies that are attempting to collect debts on behalf of someone else.

How the FDCPA protects consumers

Abusive practices

Debt collectors typically call because they are trying to get consumers to pay back defaulted credit card balances, past due utility and medical bills, or auto repossessions, Silverman said. They will first call the primary phone number provided on the loan or service application, and will move on to other contact information if they can’t reach you there.

“If they are not able to get the person, they will just go down the line to any secondary number the person provided,” Silverman said. “If the credit application had a reference listed, they will start calling references. If an employer is listed, they will call there, too.”

The first calls will usually come from the agency you owe. For example, if you have a $5,000 balance on a credit card and you’ve stopped making minimum payments, you will likely get a call from the company’s in-house debt collector. Typically, if the consumer doesn’t respond after 180 days of collection attempts, the credit card company will write off the debt and sell it to a third party for between 2 and 5 percent of the face value of the debt, Silverman said. A $10,000 loan balance, for example, could be sold to a collection agency for between $200 and $500. If that debt collection agency doesn’t collect in full, the remaining balance may be sold again for pennies on the dollar.

“One debt, over a long period of time, can be collected by multiple people or types of people,” said Dave Maxfield, a consumer protection law attorney based in Columbia, S.C.

Third-party debt collection companies, especially those who buy debt for the cheapest price, tend to harass consumers the most, Maxfield said. Often, they are in violation of the Fair Debt Collection Practices Act, which limits what third-party debt collectors can say and do.

FDCPA rules about contacting consumers

Time and place: Debt collectors are usually only allowed to contact you between 8 a.m. and 9 p.m. in places that are convenient to you. That means they can call you at work, but not if they know you’re not allowed to receive communications from debt collectors there.

Harassment: The FDCPA prohibits third-party debt collectors from harassing, oppressing, or abusing anyone they contact. This can include:

  • Using profanities or obscene language.
  • Calling over and over to annoy, abuse, or harass someone into answering the phone.
  • Threatening harm or violence.
  • Not telling the consumer who they are.
  • Publishing lists of people who are not paying their debts, not including information that is reported to a credit reporting company.

Representation by an attorney: Once a debt collector knows that you are being represented by an attorney, the debt collector must stop contacting you and instead communicate with the attorney. However, this rule only applies if the debt collector can easily find your attorney’s contact information. If you have legal representation and a debt collector calls, tell them your attorney’s name and that the caller should contact him or her in the future.

Unfair practices

The FDCPA prohibits debt collectors from treating consumers unfairly when they are trying to collect a debt.

Here are some of the forbidden practices:

  • Contacting consumers by postcard. They may, however, call, email, text, or send you a letter.
  • Taking or threatening to take your property, unless they can legally do so.
  • Attempting to collect interest or fees over the amount you owe, except in cases where the contract that created your debt or state law allows it.
  • Depositing a post-dated check early.

Fraudulent claims

Maxfield said that he’s seen an increase in debt collection scams, particularly when third-party debt collectors try to collect on old debts such as payday loans.

In these cases, the debt collectors only have an electronic file with a consumer’s basic information when they buy other people’s debts. They usually don’t have any information verifying the debts, such as account statements, and they often submit false affidavits supporting their claims of how much consumers owe.

Basically, debt collectors can’t lie to you about how they are going to collect the debt or use fraudulent information to try to collect the debt.

Here’s what else they can’t say and do:

  • Falsely claim that they are attorneys or government representatives, or that they work for or operate a credit reporting company.
  • Falsely claim that you have committed a crime or that you will be arrested if you don’t pay your debt.
  • Misrepresent how much you owe.
  • Threaten to garnish, attach, or sell your property or wages, unless the action is legal and they intend to take such action. Four states prohibit garnishing of wages, Silverman said.
  • Threaten legal action against you if it is illegal in your state or they don’t intend to follow through.
  • Send you paperwork that appears to be official or legal when it isn’t.

What does the FDCPA cover?

The FDCPA covers collections of personal debts including:

  • Mortgages
  • Credit cards
  • Medical debts
  • Other debts related to family, personal, or household purposes

What does the FDCPA not cover?

  • Business Debts
  • Debt for agricultural purposes
  • Collection efforts by the original creditor

It’s important to note that states have their own consumer protection laws that may cover aspects of debt collector behavior that the FDCPA may not, Maxfield said.

CFPB proposes new regulations for the FDCPA

On May 7, 2019, the Consumer Financial Protection Bureau proposed a rule to implement the FDCPA. The proposal aims to clarify how debt collectors may contact and communicate with borrowers, and it helps borrowers more easily access information on relevant consumer protection laws when a debt is being collected.

The proposed rule aims to accomplish the following:

  • Set clear limits for debt collectors calling borrowers: Under the proposal, a debt collector would be limited to a maximum of seven call attempts per week per debt. Further, once a debt collector has spoken to a borrower about the debt, the collector must wait a minimum of seven days before calling the borrower again.
  • Outline the ways debt collectors may contact borrowers: The proposal outlines how debt collectors may communicate via voicemail, email and text message, and would also protect borrowers who do not want to be contacted in these ways. Borrowers may also request debt collectors only contact them at certain times and at a specific phone number. According to a CFPB spokesperson, the rule makes clear that collectors who text or email “too frequently” may face consequences too, and the new rule would require text messages and emails to have an option to unsubscribe.
  • Require debt collectors to provide borrowers with information on the debt in collections and consumer protections: Some borrowers may struggle to understand their rights under the Fair Debt Collection Practices Act or may not have a record of the defaulted debt — the proposal aims to curb that. Debt collectors would be required to disclose certain information about the debt and relevant consumer protections, such as a borrower’s right to dispute a debt.
  • Stop debt collectors from suing over time-barred debts: Certain kinds of debt in default has an expiration date on how long creditors and debt collectors have to collect on it. Debt that has passed the statute of limitations is known as time-barred debt, and this new proposal would bar debt collectors from suing or threatening to sue borrowers if they know the statute of limitations has expired.
  • Set a restriction on debt collectors reporting a time-barred debt to credit reporting agencies: The rule would stop debt collectors from passing on information about a time-barred debt to credit reporting agencies before communicating with the borrower.

The proposal is expected to be published in the federal register this month. Afterward, the CFPB will solicit feedback for 90 days. One year after the proposal is published, the rule will go into effect.

What to do when a debt collector calls

Often, a call from a debt collector can catch you off guard, especially if you don’t recognize the debt the caller says you owe.

Here’s what to do when a debt collector calls:

1. Hang up or shorten the conversation.
You do not want to acknowledge over the phone that you owe the debt. “First of all, request that all contact is in writing. That way there’s a paper trail for all future communication,” Maxfield said. After making this request, “Don’t respond to verbal attempts to communicate, but keep track of them, as such attempts may violate the law,” Maxfield advised.

Instead, the CFPB advises you ask the debt collector for information, such as how much you owe, who the original creditor is, and the name and address of the debt collection agency. Insist that all further communication be in writing.

2. Verify whether the loan is yours
Under the Fair Debt Collection Practices Act, five days after a debt collector contacts you, he or she must (in most cases) have sent a written notice outlining:

  • The amount of the debt.
  • The name of the creditor to whom the debt is owed.
  • A statement that the debt will be considered valid 30 days after the notice is sent if the consumer does not dispute the validity of the debt.
  • A statement that if the consumer notifies the debt collector, in writing, within 30 days that all or part of the debt is disputed, the debt collector will get verification of the debt or a copy of a judgment against the consumer. The debt collector will mail the debt verification or judgement to consumer within 30 days.
  • A statement acknowledging that upon written request, the debt collector (if a third-party agency) will provide the consumer with the name and address of the original creditor.

3. Begin a written correspondence
When you get the letter, respond with a written request for validation of the debt to prove that the collector’s agency actually owns the debt. “You may see something that’s not your debt at all, like an ID theft situation,” Maxfield said. “Whether it’s your debt or not, having more information allows you to make better decisions about what to do.”

The CFPB provides sample letters that consumers can personalize and send to debt collectors.

What NOT to do when a debt collector calls

Some debt collectors will try to intimidate you with threats into urging you to enter a settlement you may not be prepared to honor or don’t need to pay, Silverman said. They may call you a deadbeat or say they are going to call your boss if you don’t pay your bills, and if it’s a third-party debt collector, they are violating the Fair Debt Collection Practices Act.

It’s important not to engage with debt collectors like this on the phone. Do not give out payment or financial information, Maxfield said, and request that all further communication be in writing.

Frequently asked questions about debt collection

What if I don’t think I owe any money?

As soon as possible, send the debt collector a letter stating that you don’t owe any or part of the debt. The collector must stop contacting you, but the agency can start calling again if it sends you a written verification of the debt.

Can a debt collector tell other people about my debt?

In most situations, they can’t, unless it’s your spouse or an attorney who is representing you. The collector may contact others to get your home address, place of employment and home phone number, but they usually are barred from contacting them more than once. Despite their threats, third-party debt collectors cannot call your mom, your supervisor or your neighbor to tell them you aren’t paying your bills.

Can a debt collector garnish my wages or bank account?

In four states, the answer is no, Silverman said. In other states, if a debt collector sues you to collect and wins, the court can enter a judgment against you that could allow the creditor or debt collector to take out a garnishment order or direct the bank to give money from your account to the creditor.

Some federal benefits are generally exempt from garnishment (but not always):

  • Social Security
  • Veterans’ benefits
  • Supplemental Security Income (SSI) benefits
  • Federal Emergency Management Agency disaster assistance
  • Civil service, federal retirement, and disability benefits

What if I feel a debt collector has broken the law?

If you are being harassed or think the debt collector is pursuing a fraudulent claim, contact a consumer law attorney who specializes in debt collection. The attorney can investigate whether the claim is valid, offer legal advice, and even sue the debt collector if the case is especially egregious.

“There are some strong federal protections (for consumers), and in a successful case people can get statutory damages and attorney fees,” Maxfield said. “ I can generally represent the consumer without it costing them anything.”

How do I get a debt collector to stop contacting me?

Silverman said that some people simply try to avoid debt collectors by changing their phone number or getting a new cell phone, but there are other channels to stop the calls.

The simplest way is to start paying off the debt if you actually owe it. Debt collectors may be willing to negotiate settling for a lower amount and creating an installment payment plan for you.

Another option is to hire an attorney, who will manage communication with the collector and dispute any questionable debt claims the debt collector has made. When debt collections companies are notified that you have hired a lawyer, they must stop contacting you and communicate with your attorney instead.

If you don’t want to hire an attorney, you can send a cease and desist letter to the debt collection company. After the company receives the letter, it can only contact you to tell you that all communications will stop, or that they are pursuing legal means to collect the debt. Be aware, however, that the debt collection agency may respond with a lawsuit.

What if I owe multiple debts?

If you have stopped paying on more than one debt that has been turned over to a debt collections agency, you could be setting yourself up for a nightmare situation. You may want to consult a nonprofit credit counselor to see what your best options are for getting back on track. The National Foundation for Credit Counseling is a good place to start your search.

What if the amount the debt collector says I owe is incorrect?

It is a common practice for third-party debt collectors to misrepresent the amount of debt you owe, Silverman said. “They are operating with false information, false debts and use caller ID spoofing to disguise who they are and where they are calling from,” he said. “Typically, they don’t have the necessary documents to prove their legal right to recover the debt and are very aggressive about suing people to recover these debts.”

If you receive validation of the debt and still think it’s wrong, contact a consumer law attorney. You could have a case to sue the debt collection agency for violation of the FDCPA.

Getting out of debt can be a long and difficult process, and debt collectors can make it even more painful. If you think debt collectors are contacting you in error and are breaking the law, talk to an attorney. Otherwise, use these strategies to stop debt collectors from calling and focus on paying off your debts.


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