How the Fair Debt Collection Practices Act Protects You

What Is the Fair Debt Collection Practices Act (FDCPA)? 

The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers from abusive, misleading, or harassing tactics by debt collectors trying to collect on consumer debts.

Who Does the FDCPA Apply To?

The FDCPA applies to third-party debt collectors and debt collection agencies. It does not apply to original creditors. The original creditor is the financial institution that initially lent you money or extended credit to you. It could be a credit card company, a bank, an online financial institution, or other financial entity.

Debt collectors are defined, by law, as individuals or businesses whose “principal purpose” is the collection of debts. This can include lawyers and law firms who collect debts as part of their business. When a debt collector is calling you, it’s because they bought the debt from the original creditor.

Original creditors are not subject to the FDCPA since a creditor’s primary business is to provide or extend credit. However, if the original creditor uses another name or acts as a third-party debt collector when trying to collect an unpaid debt, then they are considered debt collectors and FDCPA applies.

Original creditors that aren't covered by the FDCPA are still prohibited from using abusive debt collection practices.The Consumer Financial Protection Bureau (CFPB) is a federal agency that oversees and enforces debt collection laws. If the creditor or a debt collector has harassed you or engaged in deceptive practices, you can file a complaint directly with the CFPB. Violations are subject to enforcement by the Federal Trade Commission (FTC). 

What Types of Debts Does the FDCPA Cover?

The FDCAP specifically addresses consumer debts. It does not apply to business debts. Consumer debts are those that are used primarily for personal, family, or household purposes. This can include credit cards, medical bills, personal loans, and student loans.

While the FDCPA protects you from abusive practices by debt collectors, it’s not going to help you get out of debt. A debt collector still has the right to collect on the debt, so if you can’t afford to pay back the debt, consider filing for bankruptcy.

What's Allowed Under the FDCPA?

While the FDCPA is a federal law designed to protect you from abusive practices, it doesn’t prevent the collection of debts, only how the debt is collected and the actions taken by the collection agency. For example, debt collectors can communicate with you by telephone, text messages, letters, and even social media. They can also take legal action against you by filing a lawsuit.

What's Required Under the FDCPA?

When a debt collector first contacts you, they must provide certain information.

• The debt collector has to state they’re a debt collection agency and provide their contact information.

• The debt collector should provide the name of the original creditor and the balance due on the debt.

• The debt collector should advise you that you have the right to dispute all or part of the debt within 30 days via written request. Within five days of the initial contact, the debt collector should provide any information not previously disclosed.

If you’re disputing the debt, verification of the debt is required. The name and address of the original creditor also has to be provided. During this time, collection efforts must stop.

You can also request that the debt collector stop calling you. Put this request in writing. All correspondence you send to a debt collector should be mailed certified and with a return receipt to prove it was received.

What’s Prohibited by the FDCPA?

In addition to requiring debt collectors to provide certain information after speaking to someone, the Fair Debt Collection Practices Act protects consumers by prohibiting certain things. If a debt collector violates one or more of the rules, they can be sanctioned by a court, but more on that later. For now, keep reading to find out what actions the debt collectors are not allowed to take while communicating with you. 

Debt Collectors Can't Engage in Abusive Practices or Use Profane Language

Under the law, a debt collector can contact you, but it’s how they communicate with you that could result in a violation of the law. For example, a debt collection agency is prohibited from using abusive and/or profane language, or make threats against you, your property, or your reputation.

That doesn’t mean a debt collector is prohibited from saying they will proceed with legal action such as a lawsuit as that is allowed by law. However, if the debt collector says they’re filing a lawsuit to take away everything you own, that’s not only abusive but also threatening and a violation of the FDCPA.

Debt Collectors Can't Annoy, Harass, or Abuse You

The FDCPA also prevents debt collectors from acts that are intended to annoy and harass you. For example, constant phone calls could be considered harassment. The law isn’t specific on the number of calls required for it to be a violation, but if the calls are repeated constantly or the intent of the debt collector is to harass you, then it’s likely they violated the FDCPA. 

If the debt collector threatens to publish your information publicly, that’s also a violation under the FDCPA. Even notices sent via mail have to be sent in an envelope that doesn’t indicate the letter is about the collection of a debt. Postcards are also prohibited.

However, the debt collector is allowed to report your information to a credit reporting agency. Since you’re entitled to a free credit report every 12 months, you should review your credit file for any inaccuracies on a regular basis.

Debt Collectors Can't Call You at Inconvenient Times

Debt collection agencies can only call you between the hours of 8 a.m. and 9 p.m. local time. If there are inconvenient times such as during work hours, let them know you can’t take personal calls while at work. If they continue to call you at work, they’re violating the FDCPA.

The debt collector can call you outside of work hours, but again, if the calls are repetitious or the intent is to annoy or harass you, that’s a violation of the United States Code. Also, the debt collector can’t contact you if you filed bankruptcy or if the debt has been discharged.

Debt Collectors Are Limited in Their Communications With Others

A debt collector can make telephone calls to a third party such as friends and family, but they’re limited in what they can say. For example, the debt collectors have to identify themselves and state they’re calling to confirm your address or contact information. But they can’t say they’re trying to collect on a debt.

If requested by the third party, they have to identify their employer. If the debt collector knows you’re represented by an attorney, they have to call your attorney directly. The only way they can contact you is if your attorney has failed to reply to requests within a reasonable period of time

Debt Collectors Can't Engage in Deceptive and Unfair Practices

The FDCPA prohibits a debt collector from using false, deceptive, or misleading practices. For example, a debt collector can’t say or even imply they’re an attorney or representative of the government if they aren’t. Likewise, a debt collector can’t keep their identity secret and they’re required to be truthful on how much is owed on the debt.

A debt collector is also prohibited from making statements that they have no intention to follow through on or they can’t because the law prevents them. For example, your wages are subject to garnishment in a lawsuit and your bank account can be frozen, but not if the statute of limitations has expired. The statute of limitations is a law that limits the time frame a lawsuit can be filed. If the debt collector is threatening you with a lawsuit knowing that legally they can’t collect on the debt, that is considered a deceptive and unfair practice.

Debt Collectors Can't Cash Post-Dated Checks Early

While you can provide post dated checks to a debt collector, it’s not recommended. However, if you do, the debt collection agency isn’t allowed to deposit or cash the check before the date for which the check is written. The debt collector is also required to provide no less than three days and no more than 10 days written notice that they will be depositing the postdated check.

What if a Debt Collector Violates My Rights Under the Fair Debt Collection Practices Act?

Since the United States Code is federal law, lawsuits are filed in federal court. However, there are also state laws that protect you against abusive practices from a debt collector and complaints can be filed with the State Attorney General’s Office. 

Whether it's a state law or federal law violations, you can proceed to file a lawsuit against the debt collection agency. Lawsuits for violations under FDCPA must be filed within one year of the violation. By law, you could be entitled to actual damages (the actual amount you lost), additional damages of up to $1,000, and attorney’s fees.

However, before you proceed with a lawsuit, get organized and prepare yourself to deal with debt collectors. Start by keeping track of all phone calls with the debt collector. An easy way is to save screenshots if you’re using your cell phone. Also, create a file so you can keep copies of all the letters you send and documents you receive. Remember to send letters certified and with a return receipt. Because there are multiple dates to keep track of, mark those dates on a calendar. If the debt collector fails to comply with a requirement, written request or commits a violation, notify them in writing as well.

To file a complaint against a debt collector under applicable state law, the process is simple and straightforward, so it’s not necessary to hire a lawyer. If you’re going to file a lawsuit and it’s for less than $5,000, it can be filed in small claims court. The clerk of court in your county will have the forms you need since most cases in small claims court are done without an attorney. For more complicated cases, consider consulting with a lawyer.