What Is The Fair Debt Collection Practices Act?

Collecting debts can be a time consuming, complicated operation for many businesses, so to help them work with delinquent debtors in the collection process, creditors often contract with debt collectors or attorneys with knowledge of collection law and procedure. A person who gets a letter or a telephone call from a collection agency or attorney's office about a bill or debt may feel powerless. It may seem as though there is nothing that can be done to protect a person from those who are trying to collect money.

The federal Fair Debt Collection Practices Act (FDCPA), 15 USCA § 1692 et seq., gives some protection. Although the law will not make a debt or an alleged debt void, the FDCPA does give a person certain rights and can prevent abusive actions on the part of debt collectors.

Who Is Covered by the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act applies to anyone whose regular business is the collection of debts for another. This includes primarily collection agencies, debt collectors and, in most situations, attorneys and their employees.

It is important to remember that the Act does not apply to a business or a person who is collecting debt on his or her own behalf.

FDCPA Protections

The Act says that a debt collector may no longer contact you if you inform him or her in writing that you do not want any more contact. Remember, however, that just because you no longer hear from the collector does not mean that the debt, if valid, has been extinguished. A collector may go ahead and start a lawsuit against you to collect the debt.

The Act also states that a debt collector may not:

  • Contact you before 8:00 a.m. or after 9:00 p.m., your local time, without your prior consent.
  • Contact you instead of your attorney, if he or she knows you are represented by an attorney.
  • Contact you at your place of employment, if he or she knows that you are not allowed to receive such calls at work.
  • Contact third parties-neighbors, friends or family members-about the debt you are claimed to owe. The collector may only contact third parties about your location.
  • Use obscene or profane language.
  • Use or threaten violence.
  • Publish a list of people who do not pay their debts.
  • Call or make a telephone ring continuously.
  • Call on the telephone and not identify himself or herself.
  • Threaten criminal prosecution.
  • Make any false or misleading statement.

Hearing from bill collectors is not a pleasant thing. You can at least be certain that the collectors stay within legal bounds if and when they do contact you.

In addition to the FDCPA, your state consumer protection laws may provide additional protections for debtors and procedural requirements or restrictions for creditors.

Penalties

Most bill collectors know the law and are careful to obey all legal requirements. Some, however, go outside the law when trying to collect a debt. If a bill collector violates the FDCPA, your first defense is to tell him or her in writing to stop contacting you. You may want to report the matter to the Federal Trade Commission (FTC) and to the Attorney General's office in your state. Remember that your state law may provide additional legal remedies.

The FDCPA allows a debtor to sue a collector in federal or state court within one year of the violation date. Violators are liable for actual damages, which may include expenses, interest and even an amount for mental or emotional distress. The Act also provides for other damages within the court's discretion of up to $1000. In determining these additional damages, the court is to consider the egregiousness of the violation and whether it was intentional. A debtor who successfully sues a collector under the Act can also collect costs and attorneys fees.

Usually an FDCPA lawsuit can be successful without showing that the collector acted negligently or intentionally to violate the Act. However, the collector can successfully defend himself or herself if the violation was unintentional and the result of a bona fide error, so long as there were procedures in place to prevent such an error.

The Act also provides for class action lawsuits where appropriate.

Debtors are protected and creditors are regulated by the FDCPA and similar state laws during the debt collection process. If you are a debtor or creditor with legal questions, contact our firm to schedule an appointment with an attorney who is knowledgeable in the law of debt collection.

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