Fair Debt Collection Practices Act
What is the Fair Debt Collection Practices Act?
The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using deceptive, unfair or abusive practices to collect money from you. Anyone who regularly collects debts, including collection agencies, lawyers, and companies that buy delinquent debts, must abide by the rules set forth under the FDCPA. These rules apply whether a creditor mistakenly believes you owe money or you actually do owe money.
The FDCPA became effective in March 1978 and is designed to protect both consumers and reputable debt collectors from unfair competition. It also encourages state action to protect consumers. The FDCPA applies to debt incurred by consumers for personal, family, or household purposes and does not cover business, corporate or agricultural debt.
Among the obligations FDCPA laws cover are:
- Credit card debt
- Medically related debts
- Personal, family or household debts
In short, the FDCPA was enacted to protect consumers from unscrupulous debt collectors and to give them a chance to challenge any debts they do not actually owe.
Examples of how the Fair Debt Collection Practices Act works
No harassment. Debt collectors are not allowed to harass you or anyone else you know over the phone, in person, or by mail. They cannot be abusive or threaten you in any way.
Reasonable hours and place(s) of contact. Debt collectors are prohibited from contacting you before 8 a.m. or after 9 p.m. They are not allowed to contact you at work if they know you are not allowed to talk to them while on the job.
Attorney representation. Once a debt collector knows an attorney is representing you, he must cease contact with you. Any contact he makes must be through your attorney.
Per the FDCPA, there are other things a debt collector cannot do, including:
- Use profane or vulgar language in an attempt to intimidate you.
- Lie about the amount of debt owed.
- Tell you they are an attorney or law enforcement officer if they are not.
- Contact anyone other than you, your spouse, or your attorney.
- Threaten legal action when none is actually being considered.
- Give false information about you and your account to credit reporting bureaus or another business, or threaten to do so.
- Publish your name, address, or any other personal information on a list of bad debts.
The FDCPA says that once you tell a debt collector in writing to stop contacting you they must stop. The only further communication they can have with you is to:
- Tell you there will be no further contact.
- Let you know whether they are going to take a specific action against you, such as file a lawsuit.
Further, the FDCPA gives you the right as a consumer to demand certain information about the debt. If asked, a debt collector must provide you:
- The name of the creditor they represent.
- The amount you are alleged to owe.
- The fact that you have the legal right to dispute the debt.
- The name and address of the original creditor, if the debt has been sold to another party or taken over by another creditor.
In the event the debt collector does not provide you with this information during their initial contact, they must send it to you in writing within five days of that first call. If you disagree that you owe part or all of the debt, you must dispute it in writing within 30 days of receiving the information from the debt collector. Once you dispute the debt, the debt collector cannot make contact with you again until he or she has provided you with written verification of the debt.
Use our free calculator to figure out your debt-to-income ratio, which is a key ratio that lenders consider.