Having debt in collections can be downright overwhelming, especially when debt collectors bombard you with dozens of phone calls.
Debt collectors are notorious for harassing consumers when they seek repayment, calling excessively and threatening to take actions that may not be legal.
What you may not know is that you are protected by the Fair Debt Collection Practices Act (FDCPA), a law designed to keep third-party debt collectors in check when they contact you.
In the guide below, we’ll walk through all the ways the FDCPA protects you and give you some pointers for dealing with debt collectors when they violate the law.
What Is the Fair Debt Collection Practices Act (FDCPA)?
The Fair Debt Collection Practices Act is the federal law that sets rules for how debt collectors can contact debtors, protecting consumers from unethical or inaccurate collection attempts.
Often abbreviated as the FDCPA, this law was passed in 1977 and amended in 2010.
It is enforced by the Federal Trade Commission, a federal agency that protects consumers and maintains fair competition in the marketplace, including debt collection attempts.
The law specifically limits how and when collections agencies can contact you, and it allows you to dispute debts.
What Does the FDCPA Apply to?
It’s important to understand what types of collections the FDCPA does, and doesn’t, apply to.
There are two key distinctions here:
- Third-party debt collectors: The FDCPA pertains to collection attempts by third-party collectors/debt collection agencies, who either purchase debts from lenders/service providers or are employed by them to help collect payments. The law does not pertain to the initial creditor or provider.
- Consumer debts: The FDCPA applies to all consumer debts, like credit cards, student loans, and medical bills, but it does not apply to commercial debts. So if your business defaults on a loan or payments, without a personal guarantee, it is not protected by the FDCPA.
With that in mind, let’s dive into the protections offered by the Fair Debt Collection Practices Act.
How the Federal Debt Collection Practices Act Protects You
You can read the Federal Debt Collection Practices Act in its entirety, but here are the most important ways it protects you.
It Limits How Debt Collectors Can Contact You
First and foremost, the FDCPA sets the terms for all of a collection agency’s correspondence with you.
It ensures that debt collectors do not overstep by contacting you at inappropriate times, or sharing your information with others, limiting their interference with your daily life.
Here are a few specific guidelines:
- A debt collector may only contact you between 8 a.m. and 9 p.m.
- Collection agencies are prohibited from contacting you at work at your request.
- You may choose to only communicate with debt collectors in writing.
- You have the right to stop debt collectors from contacting you (Just note that it won’t get the collections account off your credit report, and unpaid debts may lead to a lawsuit).
- Debt collectors are prohibited from contacting third parties such as your employer or relatives about your debt.
- Collection agencies may speak exclusively with your attorney if you choose.
According to the FDCPA, you must make any requests about how the collections agency contacts you in writing.
The Consumer Financial Protection Bureau, another federal agency at your disposal, provides sample letters for several of these requests.
It Prohibits Debt Collectors from Harassing or Threatening You
Debt collectors should be above board in all of their communications with you, from the actions they propose to the language they use.
- Using profane language
- Threatening to inform your friends, family, or coworkers
- Publishing your debts to the public
- Threatening violence against you
- Threatening to garnish wages without a court order
- Threatening to take your personal property illegally
- Calling repetitively to harass you
It Requires Debt Collectors to Be Honest with You
Debt collectors are legally bound to be completely transparent with you in their collection attempts.
That means they can’t falsely represent themselves as police officers, government agents, lawyers, or representatives of credit bureaus.
Likewise, they can’t mail you letters designed to look like legally binding government documents.
Once again, they are not permitted to lie about the repercussions of failing to make a payment, by threatening illegal actions like suing you beyond the statute of limitations or seizing your property.
Last, debt collectors are not allowed to misrepresent any of the details regarding your debt, though they may choose not to disclose them.
These include the amount of money you owe and the statute of limitations on the debt. They are also not allowed to deposit a post-dated check early or collect more than you owe.
It Allows You to Seek Debt Validation
One of the most important and often overlooked aspects of the FDCPA is debt validation.
Whenever a third-party debt collector claims you owe them money, they are legally required to present you with proof of your debt.
They also have to send you further information if you submit a debt validation letter.
Under the FDCPA, you should receive a letter within 5 days of being contacted by a collections agency, one which includes:
- The original lender/service provider’s name
- The amount of money you owe
- Instructions for repayment
- An understanding that the debt is valid unless you dispute it within 30 days
- An understanding that if you send a debt validation request within 30 days, the agency will provide it
If a debt collector cannot provide adequate documentation of a debt, they must report it to the credit bureaus, withdrawing credit entries from your report, and ceasing their communications.
It Allows You To Take Legal Action When a Debt Collector Violates the Law
According to the Federal Trade Commission and the Consumer Financial Protection Bureau, debt collectors garner more complaints than any other financial industry under their jurisdiction.
In fact, the FTC lists dozens of lawsuits it has waged against popular debt collectors for violating the FDCPA.
If you feel that your rights have been violated, it’s easy to take action against the collection agency that wronged you.
You can start by filing a complaint with the CFPB here.
Likewise, you can complain to the state attorney general’s office or the Federal Trade Commission.
You may also seek legal action against the debt collectors, as many law firms are well-versed in dealing with collections agencies and violations of the FDCPA.
Last, you may want to consider hiring a credit repair company to help confront the collections agency and make sure they follow the tenets of the FDCPA.
Tips for Dealing with Debt Collectors
If a debt collection agency is contacting you, take advantage of the protections offered to you by the Fair Debt Collection Practices Act.
As long as you know your rights, you can hold debt collectors accountable for their actions and make dealing with the agency as stress-free as possible.
When you interact with debt collectors, keep the following pointers in mind:
- Track your score: Stay on top of your credit with a free credit monitoring service, looking out for faulty reporting, identity theft, and any overall changes to your score.
- Act quickly: When a collections account entry appears on your credit report, you should contact the agency as soon as possible to dispute the claim in time.
- Be informed: Before you pay a debt collector or share your information, make sure they’re legitimately using the information above so you don’t get scammed.
- Send letters: Whether you’re disputing a debt, ceasing communications, or negotiating a payment, handle all of your correspondence with debt collectors by letter for verification.
- Document everything: Along those lines, make note of any violations of the FDCPA. Having a log of all your interactions can be critical if you need to file a complaint or lawsuit.
- Get help: If you feel like you need assistance dealing with a debt collector, don’t hesitate to get a consultation from an attorney or credit repair specialist.
- Report violations: If a debt collector infringes on your rights, report it. The FTC and CFPB are there to protect consumers and stop debt collectors from breaking the law.