The law prohibits debt collectors and creditors from contacting borrowers at work once they have reason to know that a borrower's employer doesn't permit these kinds of calls. The law does allow for other collection tactics, so it is important for borrowers to know their rights concerning debt collection communications.
Written by Attorney Todd Carney.
Updated November 22, 2021
Being in debt is never fun. On top of figuring out how to pay your bills, you may also be worried about damaging your credit. When debt collection agencies start calling you at work, it just adds to the stress. Luckily, there are federal and state laws that limit when and if debt collectors can contact you at work.
Even beyond the workplace, you can take steps to protect yourself from unfair debt collection practices that inspire stress and can harm your credit score. This article examines both your rights under the law and how to protect yourself successfully.
Debt Collectors Generally Can’t Call You at Work
Debt collectors are generally allowed to call you at work, unless and until they have “reason to know” that your work forbids these kinds of calls. Under the federal Fair Debt Collection Practices Act (FDCPA), debt collectors can’t call you work once they have this information. If you receive a phone call like this at work, tell the debt collector that your place of employment forbids these kinds of calls. This is giving them “reason to know.”
Although you can tell them not to call you at work anymore over the phone, it’s a good idea to follow up with a written letter. By law, after you send this notification, collectors can’t make any further calls while you're at work. If the debt collector keeps calling or violates the law in any other way, you have the right to bring legal action against the debt collector in either state or federal court. You may be able to recover actual damages, statutory damages up to $1,000, attorney fees, and any costs associated with court.
Debt Collectors vs. Original Creditors
Debt collectors are companies that collect debt on a creditor’s behalf. Debt collectors often work on behalf of a debt collection agency. By contrast, an original creditor is the entity that originally lent you money. This could be a bank or a credit card company, for example. This distinction matters when it comes to the law. Debt collectors are forbidden under the FDCPA from calling you at your place of employment, but original creditors are not--at least, not under this specific regulation.
While the FDCPA governs debt collection practices, it’s not the only way debt collectors and creditors are regulated. The Federal Trade Commission (FTC) Act says that if a creditor calls your employer and has reason to know that your employer doesn’t permit the call, it can be considered an unfair means of collection. Again, you can give the creditor “reason to know” by just telling them that you can’t take these calls at work. In other words, the FTC Act protects you from creditors calling you at work, just like the FDCPA protects you from debt collectors calling. One important difference is that the FTC Act doesn’t give you the ability to file a lawsuit against the creditor if they violate this law. But you can pursue a complaint through the FTC.
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The FDCPA Prohibits Many Debt Collection Tactics
Calling you at work isn’t the only way debt collectors will try to contact you. Third-party debt collectors may use many tactics to get you to pay the money you owe. The FDCPA permits some of these strategies and doesn’t allow for others. It’s important to know which are lawful and which are against the law so you can protect your rights.
Under the FDCPA, debt collectors aren’t allowed to:
Publicize your debt. This means that a collector can’t come to your office, since it would provide notice of your debt to your co-workers.
Call you at certain times. They aren’t permitted to call you before 8 a.m. or after 9 p.m.
Contact you after you’ve requested that they no longer contact you. You can make this request by phone or with a written notice. If it’s in writing, be sure to keep a copy of the letter. While this should stop the contact, it won’t release you from owing the debt.
Harass you. Harassment can include repeatedly making calls, making any information about your debt public, using offensive language, and making violent threats.
Try to collect debt that you don’t owe. This is important because debt collectors may have the wrong information about a debt since debts are frequently bought and sold. This can cause the collector to mistakenly identify the borrower or the debt in question, since your contact information is going through so many people.
Place you under arrest or threaten to do so. That said, if the collector files a lawsuit against you and you don’t go to court, you could lose by default and be ordered to make subsequent court appearances. If you don’t show up for these court-mandated appearances, the collector may be able to get an arrest warrant.
If a debt collector has done any of these actions, you can report them to the Consumer Financial Protection Bureau (CFPB), the FTC, and the office of the attorney general in your state. If these organizations can’t help you completely, it might be worth reaching out to an attorney for legal advice. A lawyer can help you write a cease-and-desist letter and help you understand what next steps you can take.
Debt Collectors May Lawfully Take Some Actions
Debt collectors are prohibited from many collection practices, but by federal law they can legally pursue many methods of collection. First, debt collectors are allowed to pressure you. While collectors can’t levy threats or provide you with false information, they can call you every day, send you letters, and raise the prospect of a lawsuit, as long as they don’t violate the FDCPA.
You may think that debt collectors can’t legally try to collect on an expired debt, but they can. Debts from credit cards, medical bills, utility bills, and other consumer debts (generally known as unsecured debts), have a statute of limitations. This gives creditors and debt collectors a time limit to sue you to collect the debt. If the time limit has passed, you can’t be sued for the debt, but debt collectors can still contact you and use other legal means to try to collect the debt.
Additionally, as mentioned above, debt collectors can sue you to collect a debt, so long as the statute of limitations hasn’t expired. If you are sued over a debt, it’s important to file a response to the lawsuit with the court and show up to any hearings. This way, you can present any defenses you may have and make the debt collector prove that you owe the debt. Losing a lawsuit can come with serious consequences. Debt collectors can get a court judgment for a wage garnishment, bank levy, and other collection methods.
Debt collectors can also put your debt up for sale. Another debt collector or a debt buyer can purchase it. If a collector is unable to collect on part or all of your debt, then they can sell it off. As mentioned above, when debts are transferred or sold, this process can result in incorrect information about the debt, who owes it, and whether it’s been paid.
Interestingly, this act of buying and selling debt makes it possible for debt collectors to negotiate with you on how much you must pay to consider the debt paid. People often buy and sell debts for fractions of the amount of the debt. Given this, if you owed $1,000, and someone purchased your debt for $100, they might be willing to accept $250-$500 for it. While these debt settlement negotiations often require you to have a lump-sum payment to offer, you may be able to establish a payment plan with the collector to allow more flexibility in paying back the debt.
If you can get the debt holder to agree to a settlement, be sure to get your agreement in writing when you pay the debt. You can do this by drafting a simple debt validation letter which states that the debt collector agrees that you have paid off the debt.
The FDCPA protects consumers against abusive debt collection practices. A debt collector can’t call you at work if they have reason to know that your workplace forbids it or if you tell them not to. The FDCPA doesn’t apply to original creditors. But like debt collectors, original creditors can’t call your workplace if you tell them not to because of the FTC Act. The law also protects consumers from abuse, deception, and other unfair debt collection practices.
If you’ve experienced unfair debt collection calls or practices, you can reach out to the CFPB, FTC, or your state’s attorney general office.