The Fair Debt Collection Practices Act was originally enacted in 1977, and the Consumer Financial Protection Bureau is trying to bring it into the 21st Century. Think about it -- back then, it was illegal for debt collectors to call you at work if you asked them not to. It was against the law for them to call you too early or late in the day. It was illegal for them to harass you.
Updating Debt Collection
But today, many people don't even have landlines. If a debt collector calls you on your cell, they are quite likely to catch you at work or in public. And today, many people's area codes on their phone numbers don't match their physical location -- so collectors are likely to accidentally overstep their boundaries, time-wise. And what about texting? Should a bill collector be allowed to text you?
Current law also fails to deal with a fairly new twist on debt collection -- companies that purchase really old past-due accounts (called "zombie debt") for pennies on the dollar. These “debt buyers” often acquire just a spreadsheet with names of delinquent borrowers from banks and credit card companies. Then they attempt to push people into paying up, but there is no proof the debt is owed or that the person contacted is even the correct debtor.
Updated laws should allow creditors to reasonably collect what they're owed, while assuring the public that records are accurate and privacy is respected.
What Debt Collectors Can and Can't Do Today
Activities that are prohibited by the Fair Debt Collection Practices Act:
Harassment. Debt collectors cannot harass you. That includes:
- using threats of violence or harm;
- publishing a list of people who don't pay debts (but they can report to credit bureaus)
- using obscene or profane language;
- repeatedly using the phone to annoy you.
False statements. Debt collectors are not allowed to lie to you, for example:
- falsely claiming that they are attorneys or government employees;
- falsely asserting that you have committed a crime;
- falsely stating that they operate or work for a credit reporting company;
- misrepresenting the amount you owe;
- mischaracterizing paperwork as a legal form if it isn't, or as a non-legal form if it is.
Debt collectors also are prohibited from saying that:
- you will be arrested if you don’t pay up;
- they’ll seize, garnish, attach, or sell your property or wages -- unless they are allowed to by law and they intend to do so;
- legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.
Debt collectors may not:
- give false credit information about you to anyone, including a credit bureau;
- send you anything that looks like an official document from a court or the government if it isn’t;
- use a false company name.
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
- try to collect any interest, fee, or other charge on top of the amount you owe unless the agreement between you and your creditor – or your state law – allows the charge;
- deposit a post-dated check early;
- take or threaten to take your property unless it can be done legally; or
- contact you by postcard (which violates your privacy).
What if You Don't Believe that You Owe the Debt?
The collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money. Send the debt collector a letter (within 30 days of receiving a validation notice) stating that you don’t owe any or all of the money, or ask for proof of the debt. They must stop contacting you. However, a collector can begin contacting you again if it provides written verification of the debt, for example, a copy of a bill for the amount you owe.
Can You Make the Collection Agency Leave You Alone?
When a collector contacts you, you might be able to resolve the issue by speaking to the representative – even if you can’t pay up right away or think that the collector is contacting you by mistake. If you decide that you don’t want to be contacted again, tell the collector in writing.
Send your letter by certified mail and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, unless they're letting you know that there will be no further contact or that they or the creditor intend to take a specific action, like filing a lawsuit. Just understand that stopping the contact doesn't make the debt go away -- you can still be sued.
Where do I report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney General’s office, the Federal Trade Commission, or the Consumer Financial Protection Bureau. Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.