Fair Debt Collection Practices Act

Congress enacted the federal Fair Debt Collection Practices Act (FDCPA) to ensure that debt collection agencies don’t use abusive or deceptive practices in order to collect debt. The law covers typical consumer debts such as medical bills, credit card bills, car loans, and mortgages.

How debt collectors can communicate with individuals
The FDCPA sets out specific limitations on when and how a debt collector may speak with someone who owes money. For example, debt collectors can’t call consumers at every hour of the day — rather, a debt collector is allowed to make calls between 8 a.m. and 9 p.m. local time. In addition, a consumer can provide notice in writing to a debt collector and explain that he or she cannot take personal calls at work; this type of notice might become necessary if an agency calls the consumer at work or if the consumer worries about the agency making calls during work hours in the future.

To stop contact from a debt collector, the consumer must send a letter to the collector by certified mail. After the collector receives the letter, they can only contact the consumer again for one of two reasons:

  • To say that any future contact will not occur
  • To initiate legal action, such as a lawsuit to recover the amount of the debt, against the consumer.

Sending a letter does not get rid of the debt, but the letter allow for a break in contact from the debt collector. It can be a good idea to speak with the collector at least once to understand the nature of the debt that he or she is trying to collect. A consumer can also request that the collector only make contact with the consumer’s attorney.

What debt collectors cannot do under the Fair Debt Collection Practices Act
The FDCPA very clearly explains which activities are not allowed when a debt collector contacts a debtor. If a collector has engaged in unlawful practices, the consumer can file a complaint against the collection agency with the Federal Trade Commission. The following activities are generally prohibited by the FDCPA:

Harassment. A collector cannot harass or openly abuse a debtor or any third party whom the agency might contact while trying to collect on a debt. The collection agency cannot threaten to publish a list of debtors’ names in the local newspaper. In addition, a collector is not allowed to repeatedly use the phone to call a person, and the FDCPA certainly prohibits threats of bodily harm to anyone.

Give false statements. A collector cannot claim to be a government official or the payroll department from the debtor’s workplace. In addition, a collector cannot say that the debtor has committed a crime by owing money or threaten to garnish the debtor’s wages. Wage garnishment cannot occur unless the creditor or collection agency has obtained a court order.

The FDCPA also prohibits collection agencies from trying to collect any interest or fees above the amount that owed to the original creditor. It can be important to get a statement from the creditor or its representative stating the exact amount that the creditor claims is due.

The Fair Debt Collection Practices Act is designed to curb abusive and false conduct by collection agencies. Consumers do have recourse under the law, especially if an agency has engaged in unlawful practices. A consumer should immediately contact the FTC or an attorney to report violations of the act.