When it comes to collecting debts, your creditors can’t simply have a field day. In fact, they face a minefield of federal regulations that state that they cannot arbitrarily or forcefully collect from you. This is due to the Fair Debt Collection Practices Act (FDCPA), a federal law that protects consumers by outlawing abusive debt collection practices.
Why Was the Law Enacted?
Congress found and declared that there was abundant evidence suggesting that Americans needed protection from debt collectors. That is why the FDCPA was enacted. Abusive debt collection practices can cause consumers to file for bankruptcy, can lead to marital instability, can cause the potential loss of a job, and involve invasions to individual privacy rights.
Who Does the Law Regulate?
The FDCPA regulates the behaviors and actions of creditors, that is, any person or business who extends credit and is owed a debt in return. Specifically, the law defines this as anyone who uses a telephone, email, U.S. mail, or another channel of communication to attempt to collect an outstanding debt. The definition applies to credit agencies, third-party collections companies, or attorneys hired to collect a debt for their clients.
Who Does the Law Protect?
The law protects you – the consumer, or the person who owes the debt – from illegal, abusive, harassing or aggressive debt collection practices. It also ensures that you’re given an opportunity to dispute your debt, that you’re kept closely informed throughout the debt collection process, and that if a lawsuit is filed, the venue selected will be convenient for you.
How Does the FDCPA Protect Me?
The FDCPA regulates debt collectors’ conduct in collecting consumer debts, setting clear guidelines for both prohibited and required conduct.
Notably, one of the required practices is the 1692g Notice, also called the “mini Miranda” notice. This is a statement that clearly informs consumers that they have the right to dispute the debt. The FDCPA requires creditors to include this notice in their very first communication with you. Essentially, the notice gives you 30 days from its receipt to dispute the debt. Your creditors cannot resume collection efforts until the 30-day period has passed. If you dispute the debt within the 30-day timeframe, your creditor must provide you written verification of your debt.
The FDCPA imposes additional required practices on your creditors, for instance:
- In its initial contact with you, your creditor has to provide a statement that the communication is from a debt collector and that any and all information gained from the interaction will be used for the purpose of debt collection. The creditor has to provide a similar disclaimer in every subsequent communication with you.
- In this initial communication, the creditor also has to provide the name and address of the original creditor. In other words, if the party contacting you is a third-party collections agency, it needs to inform you of the original creditor’s identity.
- If the creditor ends up pursuing legal action, it must file suit only in the venue in which you live or where you signed the contract giving rise to the debt.
Equally (if not more) protective, though, is the law’s list of prohibitions. In addition to requiring certain conduct of your creditors, the law also provides a litany of things they cannot do in attempting to collect a debt:
- Contact you by phone outside the hours of 8 AM and 9 PM
- Continue to try to contact you once you’ve 1) made a written request that they cease communication with you, or 2) notify them in writing that you don’t intend to pay the debt
- Call you frequently or use a threatening or harassing tone
- Contact you or pursue collection efforts at your place of employment – if your employer has advised that this is unacceptable
- Contact you if they know you’re represented by an attorney
- Communicate with you after you’ve made a request for validation of the debt
- Make any false, misleading, or deceptive statements about the nature of the debt or repercussions for failing to pay the debt
- Publish your name on a bad debt list
- Seek to collect unjustified amounts
- Threaten to arrest or sue you
- Use abusive or profane language when they communicate with you
- Talking to third parties – other than your lawyer or spouse – about your indebtedness
- Report false information on your credit report
- Use embarrassing or false media to publicize the debt
These guidelines, as well as the others in the rule, exist to protect you – as well as your right to keep and enjoy your privacy, your property, and your reputation.
If you’re concerned that a creditor is using illegal, harassing, or overtly aggressive means to collect your debts, contact an attorney or a professional debt relief company to help you navigate your debts and pay them off more quickly.