How the Fair Debt Collection Practices Act Protects You

The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers from abusive, misleading, or harassing tactics by debt collectors. This article will explore the basic protections you’re given by the FDCPA and provide you with some helpful tips on how to deal with debt collectors who don’t follow the rules.

Who Does the Fair Debt Collection Practices Act Apply To? 

The complete text of the Fair Debt Collections Practices Act (FDCPA) can be found in Section 1692 of Title 15 of the United States Code (15 USC § 1692). The FDCPA is a federal law that applies to debt collectors and debt collection agencies concerning consumer debts, not business debt. Debt collectors are defined in 15 USC § 803 as individuals or businesses whose “principal purpose” is the collection of debts. This includes 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. Debts are defined in 15 USC § 803(5) as debts that are primarily for personal, family, or household purposes. This includes credit cards, medical bills, personal 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.

Original creditors are not subject to the FDCPA since a creditor’s primary business is to provide or extend credit. However, a creditor can try to collect on debts owed to them, but if they use another name other than their own or act as a third-party debt collector, then they are considered debt collectors and 15 USC §1 692 applies. Just like debt collectors, original creditors are prohibited from using abusive debt collection practices and consumers are protected by the Consumer Financial Protection Bureau (CFPB). Complaints can be filed directly with the CFPB. Violations are subject to enforcement by the Federal Trade Commission (FTC). 

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 could even take legal action against you by filing a lawsuit.

What's Required Under the FDCPA?

During the initial contact between you and the debt collector, there’s certain information that they’re required to provide. For example, the debt collector has to state they’re a debt collection agency and provide their contact information. Since the debt was purchased from a creditor, the debt collector should provide the name of the original creditor and the balance due on the debt. You should also be advised that you have the right to dispute all or part of the debt within 30 days via written request. Within 5 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 have the debt collector stop calling you by putting your request in writing. The CFPB provides sample letters that can be sent to debt collectors. 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. 

Abusive Practices and 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 under 15 USC § 806.

Annoyance, Harassment, and Abuse

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 communications 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.

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.

Other Communications

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 collector has to identify himself 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

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.

Post Dated Checks

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 ten 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. Per 15 USC § 813 which focuses on civil liability of debt collectors, 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.

Let's Summarize...

While you may have used the FDCPA to your advantage and stopped debt collectors from harassing you, the debt collector isn’t prohibited from taking legal action. If you lose the lawsuit, your wages can be garnished and liens could be placed on your personal and real property. 

Therefore, if the issue is the amount of debt you have and you can’t afford to pay it back, you should consider filing for bankruptcy. Remember, a bankruptcy stops creditor calls and collection actions because of the automatic stay. To see if you qualify to use our free webapp to help you file for bankruptcy complete this guided quiz.