When you are getting calls from a debt collector, it is crucial to know your rights and what to do. The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits third-party debt collectors from engaging in abusive, unfair, or deceptive debt collection practices when collecting consumer debts. Read more to learn what debt collection practices are illegal and what you can do to protect yourself.
Written by Attorney Kimberly Berson.
Updated January 27, 2022
If you are struggling to pay your bills, then a debt collection agency may be contacting you. Debt collection agencies are third-party debt collectors. Their job is to collect debts for other businesses. Sometimes, they buy debt from the original creditor and become the new creditor. Debt collectors only make money if they get you to pay. So, dealing with debt collectors can be stressful. Phone calls from a debt collector can be intimidating and upsetting.
Are there any limits to when and how often a debt collector can call you? It might seem like they have no boundaries but don’t despair. The law protects you from certain debt collection activities and puts a check on debt collectors.
What Is the Fair Debt Collection Practices Act (FDCPA)?
When you are getting calls from a debt collector, it is crucial to know your rights and what to do. The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers from abusive debt collectors. It prohibits third-party debt collectors from engaging in abusive, unfair, or deceptive debt collection practices when collecting consumer debts. The law doesn’t cover the collection of business debts.
Consumer debts are debts incurred for personal, family, or household use. These debts include medical bills, credit card bills, rent, mortgages, car loans, and student loans. Collection agencies may try to collect both government and private student loans.
The FDCPA makes it illegal for debt collectors to:
Lie to you: Collectors can’t lie about the amount that you owe or threaten to sue you when they don’t intend to. They can’t pretend to be a government official. They also can’t threaten you with criminal arrest if you don’t pay up or threaten to take your property unless they legally can.
Harass you: Collectors can’t use profanity or obscene language when communicating with you. They can’t threaten to cause you physical harm or call you excessively.
Treat you unfairly: Collectors can’t disclose your debts to the public. They can’t charge you late fees and interest if the contract or law doesn’t allow it.
The FDCPA also requires debt collectors to provide you with validation information about the debt to help you determine if you owe the debt. They can do this either during the first phone call or by written notice within five days of your first communication. The validation letter must:
State how much money you owe;
State the name of the creditor you owe the debt to;
Tell you how to get the name of the original creditor; and
Provide information on how to dispute that you owe the debt.
If you don’t believe you owe the money or can’t identify the debt, you can request more information. The collector may be trying to collect from the wrong person. Within 30 days of receiving the validation letter, you need to send a dispute letter to the debt collector and ask for verification of the debt.
Once the collection agency receives the letter, they have to stop collection activity. They can resume collections after they send you written debt verification. This would be an original bill showing the amount you owe or other documentation that proves you owe the debt. Keep records of all your communications with the debt collector.
If you believe that that the debt collector is engaging in illegal behavior, you should report it to the following government agencies:
The Consumer Financial Protection Bureau (CFPB)
The CFPB is a federal government agency that protects consumer rights and investigates unfair practices by lenders, banks, and other financial institutions. You can file a consumer complaint if you are the victim of debt collector harassment.
The Federal Trade Commission (FTC)
The FTC enforces the FDCPA and will investigate a report that a debt collector has violated the law. They will seek court orders to shut down debt collection agencies that engage in illegal practices.
Your state attorney general’s office
Many states also have debt collection laws that provide additional protections against abusive or harassing debt collection efforts. They regulate debt collection behavior and may impose more restrictions on debt collectors. Your state’s attorney general would enforce those state laws.
The Fair Credit Reporting Act also protects you. It controls how debt collections appear on a credit report. When a collection agency acquires a debt, this will show up on your credit report and negatively affect your credit score. It shows that the original creditor has written off the debt.
When Can Debt Collectors Call?
The FDCPA limits when debt collectors can call you. For example, they can’t call you at an inconvenient or unusual time. They are also not allowed to call before 8 a.m or after 9 p.m. local time. If a debt collector knows that you work nights, then calling you between the hours of 8 a.m. and 9 p.m. might be considered inconvenient.
Debt collectors can call your cell phone and send you text messages, but a new rule passed by CFPB will allow you to control how debt collectors communicate with you. The rule, which goes into effect on November 30, 2021, will require debt collectors to provide an opt-out option for each method of communication. So, you can choose how a debt collector can reach you.
The FDCPA requires debt collectors to give you a disclaimer when they first contact you. They must tell you that they are attempting to collect a debt from you. They also must warn you that whatever you say or write to them can be used against you. The disclaimer protects you from being tricked into giving information that they can use against you.
You can stop a debt collector from calling you. To do this, you need to write a letter to the collection agency asking them to stop communicating with you. Once they get your letter, they can only contact you to confirm they will no longer contact you or to inform you about specific plans, such as filing a lawsuit.
How Many Times Can a Debt Collector Call?
The FDCPA doesn’t state how many phone calls a debt collector can make, but the act protects you against debt collector harassment. Calling you repeatedly and continuously with the intent to annoy, abuse, or harass you, violates the FDCPA. Under the new rules that go into effect on November 30, 2021, a collector can’t call you more than seven times in seven consecutive days. The collector can’t call you for seven days after having a telephone conversation with you about a debt. These rules won’t apply if you agree to allow them to contact you any time.
Collection Calls on Sundays
The FDCPA doesn’t restrict phone calls on any particular day. But if the debt collector knows that receiving phone calls is inconvenient for you on Sundays, this is prohibited.
Calls at Work
Collectors can’t call you at your workplace if they know that you are not allowed to receive phone calls there. If they call you at work, let them know you are not permitted to receive calls if that is the case.
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What To Do When Debt Collectors Call
Here are some suggestions about how to handle a debt collector who is contacting you.
Keep a record.
Keep a record of all communications you have with the collection agency. Document the date and time they called, who you spoke to, and what you discussed. Save these notes because if the debt collector violates the FDCPA you can use the notes as evidence to support your position.
Verify that you are speaking with a legitimate debt collection agency. People pose as debt collectors to get you to give them money. Some are trying to get personal or financial information from you. Be cautious of debt collection scams. Ask the debt collector for information to verify the debt, like who the creditor is, the amount owed, and the date of the debt.
The collector must send you a validation letter if they didn’t validate the debt during initial contact. Request it if you didn’t receive it. The validation letter should state the name, physical address, and phone number of the collection agency.
If you don’t recognize the debt, you may be a victim of identity theft. Scammers can steal your personal information and take out loans or credit cards using your identification. Check your credit report periodically to make sure no one has fraudulently opened an account with your information. Also, check for loans you may not recognize.
Dispute or create a plan to repay debt.
If you don’t believe that you owe a debt, dispute it. Send a letter to the collection agency requesting verification that you owe the debt. You also can question the amount of the debt they claim is due. The collection agency needs to provide you with documentation showing you indeed owe the debt. If you do owe the debt, it’s a good idea to try to settle it. Ask if you can pay it back through a reasonable repayment plan.
The Downside of Ignoring Calls & Letters
If you ignore calls and letters from a debt collector, there will most likely be consequences. Most debt collectors don’t walk away. They’ll probably continue their collection efforts, and at some point, you may be facing a collection lawsuit. If you receive a summons and complaint, you should file an answer to the complaint. Every state has a time limit—called the statute of limitations—for collection agencies to file a lawsuit. Check your state’s statute of limitations. A lawsuit is time-barred if the statute of limitations has expired. You can use this defense in court and the judge will likely dismiss the action.
If you don’t file an answer to the summons and complaint, the judge will probably enter a default judgment against you. With a default judgment, the debt collector can garnish your wages or bank account.
In most cases, bankruptcy will stop a wage garnishment. Bankruptcy also stops most debt collection efforts. There are two kinds of bankruptcy. Chapter 7 bankruptcy will discharge most of your debts and allow you to keep exempt assets. For example, a homestead exemption might allow you to exempt equity in your home. Chapter 13 is a repayment plan that spans 3-5 years. Chapter 7 is not available to everyone. You can use Upsolve’s free filing tool to see if you’re a good candidate. You may also want to seek legal advice from an attorney.
Having a debt collector breathing down your neck is stressful. They can be aggressive and unrelenting. But federal laws limit the actions collection agencies can take. Your state might have laws that protect you from debt collector harassment, too. If a debt collector harasses, abuses, or treats you unfairly, you can report them. They can’t continuously and repeatedly call you with the intent to harass you. If they call you at unusual or inconvenient times, you should report them.
If you need help dealing with a debt collector, contact an attorney. Although you may owe the debt, laws limit what debt collectors can do to collect it. You have rights that protect you.