Fair Debt Collection Practices Act: 5 Protections To Know
The Fair Debt Collection Practices Act (FDCPA) is federal law that protects the rights of consumers when third-party debt collection agencies come calling. FDCPA violations include harassment, threats and misleading information, and debt collectors can land in legal hot water if they trespass your rights.
What is the Fair Debt Collection Practices Act?
The Fair Debt Collection Practices Act (FDCPA) prohibits abusive, deceptive or unfair debt collection practices by third-party debt collectors. This law applies to agencies collecting debts on behalf of creditors, not the creditors themselves.
Enacted in 1978, the FDCPA notes that aggressive debt collection practices — like repeated calls to a consumer’s home, workplace and friends — can cause bankruptcies, job loss and other detrimental effects on consumers.
If a third-party debt collector violates the FDCPA, a consumer can report the company and file a lawsuit against them. Damages for violating the FDCPA can be up to $1,000 per incident.
How to report a debt collector for harassment
If you believe a debt collector is harassing you, there are several ways you can report FDCPA violations:
- Submit a complaint to the Consumer Financial Protection Bureau (CFPB) website or call (855) 411-CFPB (2372)
- Submit to a complaint to the Federal Trade Commission (FTC) website
- Contact your state’s attorney general office
5 ways the FDCPA protects consumers
The FDCPA protects consumers in very specific ways from predatory tactics that third-party debt collectors may use to get you to pay past due bills.
1. Prohibits abusive behavior
The FDCPA prohibits third-party debt collectors from harassing and abusing borrowers as a way to collect debts owed.
This type of behavior goes beyond just repeatedly calling to annoy you. According to the CFPB and FTC, debt collection agencies can’t:
- Use obscene language
- Call over and over to annoy, abuse or harass someone into answering the phone
- Threaten harm or violence
- Not tell the consumer who they are
- Lie about who they are
- Publicly publish names of people not paying their debts (though this information is reported to the credit bureaus)
2. Restricts when and how often they can contact you
Debt collectors are limited by what time of day they can contact you. They are usually only allowed to contact you between 8 a.m. and 9 p.m. your local time, unless you specify otherwise.
Debt collectors can call you at work, but not if you’ve already made it clear that they can’t contact you at your place of business.
The CFPB outlines that a debt collection agency is “presumed” to have broken the law if they contact you more than seven times in seven days or contact you again after already speaking with you about a particular debt within seven days.
If you want help fielding calls from debt collectors, you can hire a lawyer. If your debt collector has contact information for your attorney, the CFPB requires the debt collector to communicate with your counsel instead of you.
3. Forbids unfair practices
The FDCPA prohibits debt collectors from treating consumers unfairly when they are trying to collect a debt. Debt collectors must be transparent in their behavior and with the information they provide.
Under the FDCPA, debt collectors can’t do the following unfair practices:
- Demand post-dated checks for payment to use as a threat or for the purposes of setting in motion criminal prosecution
- Take or threaten to take your property, unless they can legally do so
- Attempt 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
- Deposit a post-dated check early
4. Bans fraudulent claims
Debt collectors can’t lie to you about how they are going to collect the debt or who they are. They also can’t use fraudulent information — such as lying about pressing criminal charges — to try to collect the debt.
Here’s a few other examples of what they can’t do:
- Falsely claim that they are attorneys, government representatives, or that they work for or operate a credit reporting company
- Allege that you have committed a crime and you will be arrested if you don’t pay your debt
- Lie about how much money you owe
- Threaten to garnish, attach, or sell your property or wages, unless the action is legal and they intend to take such action
- 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
5. Requires debt verification
Within five days of initially communicating with a borrower, debt collection agencies must verify your debt. They must provide the following information to you in writing:
- How much you owe
- Name of your creditor
- Statement that unless the borrower disputes the debt within 30 days of receiving notice, the debt will be viewed as valid
- Statement that if the borrower disputes the debt, the agency must provide verification of the debt or a copy of the judgment
- Statement that the debt collector must provide the name and address or original credit if it’s different than the current creditor, if the borrower requests it within 30 days
What the FDCPA covers and doesn’t cover
While the FDCPA can be effective in protecting your consumer rights in some ways, it doesn’t cover every aspect of debt.
The FDCPA covers the third-party collection of personal debts including:
- Credit card debt
- Auto loans
- Medical loans and bills
- Student loans
- Other household debts
The FDCPA, however, does not apply to the following:
- Business debts
- Debt for agricultural purposes
- Collection efforts by the original creditor
Your state may also have its own consumer protection laws that cover debt collector behavior that the FDCPA doesn’t.
What to do when a debt collector calls
If you speak to a debt collector, it’s possible to say or do the incorrect thing that could land you in even deeper legal hot water. Therefore, it’s important to know ahead of time what to say and what not to say when speaking to a debt collector.
1. Don’t initially give out information
Before you start engaging with a debt collection agency, it’s important to verify that the company is legitimate and not a scam. Don’t provide any personal or financial information until you can confirm the caller’s full name, plus the company’s name, address, phone number, website and email address.
From there, research the company, check their website and call their number.
2. Verify the debt is yours
You don’t have to acknowledge over the phone that you owe the debt. Instead, the CFPB advises you to ask the debt collector to confirm details of the debt and creditor in writing.
Under the Fair Debt Collection Practices Act, five days after you request debt verification, they must send a debt validation letter. The letter will need to include the debt balance, the name of your creditor and a description of your rights under the FDCPA.
3. Respond quickly
Once you receive a debt validation letter, you’ll want to respond quickly.
- Check the statute of limitations on the debt: If your debt surpassed the statute of limitations, your creditor may not be able to sue you for it. The statute of limitations depends on what type of debt you have and which state you live in. Remember that even if your debt is past the statute of limitations, leaving it unpaid can still hurt your credit and collectors can still contact you for it.
- Negotiate your debt: If your debt is long past due, your creditor may be willing to negotiate with you in a debt settlement for less than the total amount you owe, though there’s no guarantee. Keep in mind, debt settlement can stay on your credit report for seven years.
- Send a cease-and-desist letter: If you don’t want to speak to the collection agency anymore, you can send them a cease-and-desist letter. Under the FDCPA, debt collectors can’t contact you after you’ve sent a cease-and-desist letter except in the following cases:
- To inform you of its intention to seek legal action
- To notify you know it has the right to seek legal action against you
- To confirm it will no longer contact you
Frequently asked questions
If you start getting calls for debts that are not yours, find out who is calling you and ask for written verification that the debt is yours. Once you receive the verification letter, send a letter disputing the debt.
In most cases, debt collectors can’t inform anyone (except an attorney representing you) of your debt. While debt collectors can contact your workplace, they are restricted from providing information to whoever answers around your debt.
If a creditor sues you over unpaid debts, the court may garnish your wages to repay your creditor. Wage garnishment can come from your paycheck, commissions, bonuses, retirement programs and lump-sum payments (like sign-on and referral bonuses).
If you want debt collectors to stop calling you, you have a few options. You can negotiate to pay your debt or send them a cease-and-desist letter.
Another option is to hire an attorney. When debt collections companies are notified that you hired a lawyer, they must stop contacting you and communicate with your attorney instead.
If the debt a collection agency claims you owe is incorrect, request that the company sends you a debt verification letter. You may also want to report that debt collection agency to the CFPB or the FTC for misrepresenting how much you owe.