What is a Debt Collector?

Learn the Rules Debt Collectors Must Follow

A debt collector is anyone who collects debts owed to others. The definition of a debt collector can be found in the Fair Debt Collection Practices Act (FDCPA), a federal law setting the rules debt collectors must follow. Debt collectors covered by the FDCPA include collection agents, lawyers who collect debts on a regular basis, companies that buy delinquent debts and try to collect them, and original creditors who act like third-party debt collectors.

Debt collectors must follow the FDCPA’s rules, but some of the 4,908 collection agencies in the US do not. Here is a list of what is permitted:

Debt Collection Permitted Practices

A Debt Collector May Call Your Landline

Collection agents may call you from 8 in the morning until 9 at night, unless you agree to an earlier or later time. The 8 am to 9 pm time is for your time zone, and not the caller’s. You may, in writing, tell a collection agent to stop cease all contact with you is a cease communications notice.

A Debt Collector May Call You at Work

Collection agents may call you at work, unless you tell them orally or in writing not to call you there because you are not allowed to receive personal calls at work.

A Debt Collector May Call Your Cell Phone

Collection agents may call your cellphone, unless you tell them orally or in writing it is your cellphone and you do not wish to accept their calls on that number.

A Debt Collector May Call Someone Else to Learn How to Reach You

Collection agents may contact your employer, neighbors, and relatives only to ask for your address, home phone number, and where you work. Collection agents may not contact third parties more than once. Collection agents may not discuss your debt with anyone other than you, your spouse, or your attorney.

There are many areas off-limits to debt collectors, too, as we see below.

No Abusive, Unfair or Deceptive Practices

A debt collector may not use false statements, harass you, or use unfair or embarrassing practices to collect a debt. The list of actions the FDCPA prohibits fit in the following three areas:

Harassment

Collection agents may not harass, oppress, or abuse you or any third parties they contact. They may not:

• Threaten violence or harm
• Publish your name as a person who refuses to pay their debts
• Use obscene or profane language
• Call a telephone repeatedly to annoy anyone

Conduct Unfair Practices

Collection agents may not take certain actions, including:

• Give false information about you to anyone, including a consumer credit reporting agency
• Send you something that looks like an official court or government document if it is not
• Use a false company name
• Contact you using a postcard or any envelope that indicates the contents contain delinquent debt information
• Take or threaten to take your property unless it can do so legally
• Deposit a post-dated check early
• Collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt, or your state law, allows the charge

Make False Statements

Collection agents may not lie when trying to collect a debt. They may not:

• Claim they are lawyers (unless they really are) or, police, or government representatives
• Claim you committed a crime
• Claim to work for a consumer credit reporting agency (such as Equifax, Experian, or TransUnion)
• Lie about the amount due
• Lie about their identity or employer
• Say the documents they are sending you are legal documents if they are not
• Say the documents they are sending you are not legal documents if they are
• Claim you will be arrested if you do not pay your debt
• Claim they will seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so
• Claim they will take legal action against you, if doing so would be illegal or if they do not intend to take the action.

Lawsuits & Wage Garnishment

It is common for collection agents to threaten to garnish a person’s wages, levy their bank account, or file a lien on their property. As mentioned above, it is illegal under the FDCPA for a collection agent to threaten an action they have no intention of taking. However, it is possible for a collection agent to garnish wages, levy a bank account, or file a lien if they get a judgment first.

When the borrower does not pay a debt a promised, the lender has a cause of action (a legal reason to file a lawsuit) against the borrower for breach of contract. If the borrower does not mount an effective defense, the court will award the borrower a judgment. A judgment-creditor must follow the judgment-debtor’s state rules when collecting a judgment. Most states allow account levy, liens on property, and wage garnishment. See the Bills.com resource Collection Laws & Exemptions by State to learn more about what your state allows.

Debt Collector & FDCPA Violation

You can take three actions if a collection agent violates the FDCPA.

• File a complaint with your state attorney general.
• File a complaint with the Federal Trade Commission (FTC).
• Consult with a local lawyer who has consumer law experience.

Filing a complaint with your state attorney general and the FTC will not result in you receiving relief. However, if enough consumers complain about a collection agent’s behavior, your attorney general and the FTC will launch an investigation of the collection agent.

Consumers have have the right to sue a collection agent in a state or federal court within one year from the date the law was violated. The judge can require the collection agent to pay the consumer for any damages he or she can prove were suffered because of the illegal collection practices, like lost wages, or medical bills. The judge can require the debt collector to pay up to $1,000, even if the consumer cannot prove he or she suffered actual damages. The consumer can be reimbursed for attorney’s fees and court costs. However, even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if owed.