Debt Collection Practices constitute a very important section of Consumer Credit Protection Act. These are combined together to form an independent law under the Fair Debt Collection Practices Act.

The Fair Debt Collection Practices Act (FDCPA) has been implemented by the Congress to protect consumers from being harassed by debt collectors. During the collection of debts, it is often reported that consumers are a victim to different harassing acts by debt collectors. The concern was that the abuses were increasing the filing of personal bankruptcies. In order to prevent such illegal deeds by collectors, the FDCPA is practiced in every state of America. The Act ensures that the collection agencies collect debt payments without adopting unlawful means.

FDCPA is meant and made for governing the conduct and activities of the Debt Collectors. It legalizes the consumer's right to restrict the unethical ways of a debt collector. The purpose of the Act is to provide guidelines for collection agencies while providing protection and solution to debtors.

Debts covered under FDCPA: The FDCPA is applicable to personal, family and household debts, including debts for purchase of a car, medical care, retail financing, mortgages and credit cards. FDCPA doesn't apply to business or agricultural debts.

Normally it means any person who regularly collects debts owed to others. This also includes lawyers who collect debts regularly. FDCPA identifies any person who using different instruments of interstate commerce including mails or phone calls for collecting debts regularly as Debt Collectors. He/she may do it directly or indirectly. However, FDCPA doesn't restrict the activities of the in-house collection agents.

The act provides rules and regulations for certain activities of the debt collectors.

1. Debt collectors may contact you only between 8 a.m. and 9 p.m.

2. Debt collectors may not contact you at work if they know your employer disapproves.

• Debt collectors should not harass, oppress, or abuse debtors either by language or by action.
• Debt collectors should not publish a list of consumers who refuse to pay their debts (except to a credit bureau).
• The collectors should not use obscene or profane language.
• Repeatedly use the telephone to annoy someone.
• Call up people without identifying them.
• Advertise the debt you owe.

3. They are prohibited from the following actions.

• Falsely imply that they are attorneys or government representatives.
• Falsely indicate that you have committed a crime.
• Falsely represent that they operate or work for a credit bureau.
• Misrepresent the amount of your debt.
• Give incorrect information about the involvement of an attorney in collecting debt.
• Indicate that papers being sent to you are legal forms when they are actually not.

4. Debt collectors must identify themselves to you on the phone.

5. Debt collectors must not contact you when you ask them to do so. You must ideally inform the debt collector about this in writing.

Debt collectors are not allowed to collect debts without a proper debt validation letter. Within five days after a debt collector first calls you up, he must send you a written notice stating the amount you owe, the name of the creditor to whom you owe the money and what action you should take in case you don’t owe the money.

If you have an attorney, the debt collector may not contact anyone other than your attorney. However, if you do not have an attorney, a debt collector may contact other people, but only to find out where you live and work. Debt collectors are usually prohibited from calling up such permissible third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.

• You will be arrested if you do not pay your debt;
• They will sell your property or seize your wages, unless the collection agency or creditor intends to do so, and it is legal to do so.
• Actions, such as a lawsuit, will be taken against you, which legally may not be taken, or which they do not intend to take.
• Take or threaten to take your property unless this can be done legally;
• Contact you by postcard.

FDCPA provides you the right to question and check the validity of your loan. To know more on this read our article on Debt Validation.

Debtor's right to sue the Debt Collector

FDCPA provides the consumers with the independence to sue the collector in state or federal court within one year from the starting date of violation, according to you.

If the results are in your favor you get the following as compensation:

1. Actual damages
2. Additional damages
• Damages of up to $1,000 to the individual consumer.
• The act provides the provision for compensation in case of action damage of up to $500,000 or 1% of the debt collector’s net worth, whichever is less.
• In case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court constitute the additional damages.
3. Costs and attorney's fees: On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant, the attorney's fees reasonable in relation to the work expended and costs.

In order to restrict the guilty collectors from continuing such unethical practices, FDCPA imposes statutory damages as penalty against them. This however encourages the consumers to make the best use of their FDCPA rights. The successful consumer is also awarded the costs of legal procedures.

FDCPA not only governs the collector's activities, but also shows him the right way to deal with debts. So, just keep these rights in mind while choosing your Debt collection service provider.