The Fair Debt Collection Practices Act
The federal Fair Debt Collection Practices Act or FDCPA prohibits certain debt collectors
from engaging in abusive behavior. It covers debt collectors who work for collection
agencies. It does not cover debt collectors that are employed by the original creditor
(the business or person who first extended you credit or loaned you money). If a debt
collector that works for a collection agency breaks the law you can take steps to
make sure it doesn’t happen again.
What Bills Collectors Can’t Do
Bills collectors from collection agencies cannot do any of the following:
? Call you repeatedly or contact you at an unreasonable time (the law presumes
that before 8 a.m. or after 9 p.m. is unreasonable).
? Place telephone calls to you without identifying themselves as bill collectors.
? Contact you at work if your employer prohibits it.
? Use obscene or profane language.
? Use or threaten to use violence.
? Claim you owe more than you do.
? Claim to be attorneys if they’re not.
? Claim that you’ll be imprisoned or your property will be seized.
? Send you a paper that resembles a legal document.
? Add unauthorized interest, fees, or charges.
? Contact third parties, other than your attorney, a credit reporting bureau,
or the original creditor, except for the limited purpose of finding information about
your whereabouts (collectors can also contact your spouse, your parents if you are
a minor and your co-debtors unless you have asked them in writing to stop contacting
you).
Here’s what you can do if a debt collector engages in illegal activity:
1. Tell Them to Stop
Under the FDCPA, you have the right to tell a collection agency employee to stop contacting
you. Simply send a letter stating that you want the collection agency to cease all
communications with you. All agency employees are then prohibited from contacting
you, except to tell you that collection efforts have ended or that the collection
agency or original creditor may sue you.
You can do this even if the collector is not breaking the law, but many debt counselors
feel that, unless you’re judgment proof (that is, broke) or truly plan to file for
bankruptcy, the best overall advice is not to ignore the debt or try and hide from
the debt collector. Usually, the longer you put off resolving the issue, the worse
the situation and the consequences will become. Whether you negotiate directly with
the collector or obtain a lawyer’s assistance, many counselors feel the best strategy
almost always is to speak to the collector.
2. Document Illegal Behavior
If a debt collector breaks the law, document the violation as soon as it happens.
Start a log — and write down what happened, when it happened, and who witnessed it.
Then, try to have another person present (or on the phone) during all future communications
with the collector. In some states, you can record phone conversations without the
debt collector’s knowledge. In others, this tactic is illegal. Check with your state
consumer protection agency to find out what is permitted where you live.
3. File a Complaint
File an official complaint with the Federal Trade Commission (FTC), the federal agency
that oversees collection agencies. Ask the FTC to send you a complaint form, or just
write a letter. Contact the Federal Trade Commission at 6th and Pennsylvania Ave.
NW, Washington, DC 20580, www.ftc.gov/ftc/complaint.htm.
Include the collection agency’s name and address, the name of the collector, the dates
and times of the conversations, and the names of any witnesses. Attach copies of all
offending materials you received and a copy of any tape you made.
Also, send a copy of your complaint to the state agency that regulates collection
agencies for the state where the agency is located. To find the agency, call information
in that state’s capitol city or check your state’s website.
Finally, send a copy to the original creditor and the collection agency. The original
creditor may be concerned about its own liability and offer to cancel the debt.
Once your complaint is filed, don’t expect immediate results. The FTC may take steps
to sanction the agency if it has other complaints on record. The state agency may
move more quickly to sue the collection agency or shut it down for egregious violations.
Your best hope is that the creditor will offer to cancel the debt.
4. Sue the Debt Collector
If you’ve been subject to repeated abusive behavior and can document it, consider
suing the collection agency. But if the illegal behavior was annoying but nothing
more, don’t bother. For example, if the collector called three times in one day but
never again, you probably don’t have a case.
To sue the debt collector, you can represent yourself in small claims court or hire
a lawyer and go to regular court. (The other side may have to pay your attorneys’
fees and court costs if you win.) You’re entitled to recover the amount of any actual
financial losses — for example, your pain and suffering or the amount you paid to
switch to an unlisted number to avoid harassment — and an additional amount (unrelated
to actual losses) up to $1,000 for any violation of the FDCPA.
This weblog is sponsored by Ovation Law.