Learn Your Rights Under the Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is a federal law found at 15 U.S.C. § 1692 that regulates the behavior of collection agents. In some states, the FDCPA also regulates how original creditors may act. The FDCPA’s purpose, which became a law in 1978, is meant to “eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” §802(e)
What is a Collection Agent?
Bills.com readers state that some collection agents claim they are not subject to the FDCPA because they work for a law office or do not have the title "collection agent" or "debt collector." Who the person works for or what their job title may be is irrelevant. According to the FDCPA:
The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another… the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.§803(6)
Collection Agents Must…
The Fair Debt Collection Practices Act prohibits some behavior, which is discussed in a section below, but also requires collection agents to take certain actions. Here are the top eight actions required by the FDCPA:
Identify Themselves Accurately
A collection agent must notify the consumer, in every communication, that the communication is from a debt collector, and in the initial communication that any information obtained will be used to collect a debt.
Give Notice of a Right to Dispute a Debt
Consumers have a right to dispute a debt in part or in full, with a debt collector. Collection agents must send a consumer the 30-day §1692g notice within five days of the initial communication, excluding "a formal pleading in a civil action" for purposes of triggering the §1692g notice. The consumer's receipt of the §1692g notice starts the clock running on the 30-day right to demand verification.
Identify the Original Creditor
A collection agent must provide the name and address of the original creditor upon the consumer's written request made within 30 days of receipt of the §1692g notice.
Verify the Debt
When a consumer sends a written dispute or request for verification within 30 days of receiving a §1692g notice, then the debt collector must either mail the consumer the requested verification information or cease collections. The debt collector must report disputes to any credit bureau that reports the debt. Consumers may dispute a debt verbally or after the 30-day period, but doing so waives the right to compel the debt collector to produce verification of the debt. Verification must include the amount owed and the name and address of the original creditor.
File Lawsuits in Proper Venues
A debt collector filing a lawsuit must do so where the consumer lives or where he or she signed the contract. This rule does not prevent the consumer from filing an action in another venue against the debt collector that alleges an FDCPA violation.
Telephone During Reasonable Hours
The hours for telephone contact are from 8 am to 9 pm at the consumer’s local time.
Report Accurate Information to Credit Reporting Agencies
A collection agent must report accurate information on a consumer’s credit report. It may not threaten to report false information in the process of collection.
Cease Communications When Asked
A debt collector must cease communications in any manner after receiving written notice from the that he or she wishes no further communication, or refuses to pay the alleged debt. There are two exceptions to this rule. First, the collection agent may notify the consumer of a pending lawsuit or similar remedies, which is required by state and federal civil procedure rules. Second, the collection agent may notify the consumer it is ceasing collecting the debt.
A Collection Agent May Not…
Here are the top 12 actions prohibited by the The Fair Debt Collection Practices Act:
Misrepresent Him or Herself
A debt collector may not misrepresent himself as an attorney or law enforcement officer (Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232 (5th Cir. 1997); Russey v. Rankin, 911 F.Supp. 1449 (D.N.M. 1995)).
Use the Telephone to Annoy or Harass
A collection agent may not cause a telephone to ring or engage any person in telephone conversation repeatedly or continuously with an intent to annoy, abuse, or harass anyone at the called number.
Threaten Arrest or Lawsuit
A collection agent may not threaten a consumer with arrest. It may not threaten legal action that is either not permitted or not actually contemplated. A collection agent may not imply future judicial remedies are a virtual certainty (Schimmel v. Slaughter, 975 F.Supp. 1357 (M.D.Ga. 1997)).
Use Abusive or Threatening Language
A debt collector may no use abusive or profane language in the course of communication related to the debt.
Publish a Bad Debt List
Publishing the consumer’s name or address on a "bad debt" list is prohibited.
Contact By Embarrassing Media
A debt collector may not communicate with a consumer by post card. It may not use any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram. A debt collector may use its business name if such name does not indicate it is in the debt collection business.
Contact a Consumer at Work
A collection agent may not communicate with consumers at their place of employment after being told this is unacceptable or prohibited by the employer.
Seek Unjustifiable Amounts
A debt collector may not demand any amounts not permitted under an applicable contract or as provided under law.
Contact a Consumer Represented by an Attorney
A collection agent may not contact a consumer after it learns the consumer is represented by a lawyer.
Communicate With a Consumer After Receiving a Validation Request
If a consumer sends a written §1692g response within 30 days, the collection agent may not communicate with the consumer until it mails the consumer the requested verification of original creditor’s name and address.
It must report disputed debts to the consumer credit reporting agencies (Brady v. Credit Recovery Company, Inc., 160 F.3d 64 (1st Cir. 1998)).
Communicate With Third Parties
A debt collector may not reveal or discuss the nature of a consumer’s debts with third parties other than the consumer’s spouse or attorney. A collection agent may contact neighbors or co-workers one time to obtain location information only. It may contact a third party again if it has reason to believe the information the party provided previously is false.
File a Lawsuit or Threaten to File a Lawsuit if the State Statute of Limitations Has Expired
A collection agent may not threaten to take, or take any action that cannot legally be taken (15 U.S.C. Section 1692e(5) and Marchant v. U.S. Collections West, Inc., 12 F. Supp. 2d 1001, 1006 (D. Ariz. 1998)). This includes filing time-barred collection litigation (Kimber v. Federal Financial Corp., 668 F. Supp. 1480 (D. Ala. 1987)) and threatening to sue on time-barred debt (Freyermuth v. Credit Bureau Servs., 248 F.3d 767 (8th Cir. 2001)).
A debt collector may seek voluntary payment on a time-barred debt, as long as there is no threat of legal action. Just because a letter is on law firm letterhead is not enough to create FDCPA liability.
Bills.com FDCPA FAQ
Below are questions Bills.com readers ask frequently:
Can a Collection Agent Call My Cell Phone?
Yes. However, if you tell the debt collector it may not use that number because it is a cell phone, it may not contact you again at that number.
I Keep Receiving Dozens of Calls From Collection Agents. Is That Legal?
No. Unscrupulous collection agents will use "block parties" or "office parties" where they contact a consumer, multiple neighbors, or co-workers telling them they need to reach the consumer on an urgent matter. This is not permitted under the FDCPA.
A Collector Says I Will Be Arrested if I Do Not Pay
This was a true statement before the US Civil War, but has not been true since. People may be arrested if an aggressive judge files a bench warrant for a person who does not appear at a hearing relating to a lawsuit regarding a debt. However, in that case, the offense is the failure to respond to a court order, and not the existence of the debt. As stated above, it is illegal under the FDCPA to threaten a consumer with arrest if the consumer does not pay the debt.
How Does the FDCPA Compare With the Fair Credit Reporting Act?
The two federal laws cover different aspects of consumer law. The FCRA regulates the behavior of consumer credit reporting agencies — the credit bureaus — and the FDCPA regulates the behavior of debt collectors.
A Collection Agent is Violating the FDCPA. What Can I Do?
Take three actions. First, contact the attorney general's office in your state and file a detailed complaint. Second, contact the FTC and file a complaint using this form. These two actions may not result in immediate relief. However, when an attorney general or the FTC receive many complaints about a bad collection agent, they will investigate. Third, consult with a lawyer in your state of residence who has consumer rights experience. Violating the FDCPA is a federal offense carrying civil penalties. A consumer rights lawyer may take your case on a contingency basis, resulting in no out-of-pocket costs for you.