FDCPA can save you from Collection Agencies

When a consumer takes out any form of credit and fails to return back the amount with due interest to the lender, then the lender has full authority to hire a third party to collect the debt amount from the consumer.

But that doesn’t mean this third party can instill all forces on the consumer, to pull back the debt amount. There are limitations to their actions and violation of such limitations has its consequences.

The Fair Debt Collection Practices Act or FDCPA was propounded by the Congress to safeguard the interests of the consumers as they are often harassed by collection agencies. Debt Collection Practices constitute an important part of the Consumer Credit Protection Act. To put an end to the irregular activities of the debt collectors in United States of America, the Fair Debt Collection Practices Act is prevalent in all the states of USA.

The FDCPA is a Federal Law meant for the protection of consumers. It encompasses a set of rules governing the activities of collection agencies. The Law also defines the type of information a debt collector is entitled to collect from the debtors. Not only this, the FDCPA also lays the ground for the legal action that can be taken against the the collection agencies.

Every debt collection agency or collector should follow the Fair Debt Collection Practices Act (FDCPA) rules while collecting default debts or loans from consumers, on behalf of the creditors.

Have a look at the topics given below to know about FDCPA laws:

FDCPA helps consumers by imposing the following limitations on debt collectors

FDCPA restricts debt collectors from contacting a third party who does not owe money to the creditors. Third parties may include employers, neighbors, and relatives of the debtor. However, a co-applicant of a debtor can be contacted. However, the agency can send a postcard, letter, or telegram only if the content or the envelope doesn’t indicate the collector’s business.
FDCPA does not allow a debt collector to:
  • Ruin your credit rating
  • Refer account to an Attorney
  • Garnishment or repossession
  • Extract money by giving false threats
Making phone calls at odd hours (between 8.00AM to 9.00 PM) is prohibited. They are not allowed to call at your workplace, if your office policy does not allow it. They also can’t annoy, abuse, or harass you/or your family members by making non-stop telephone calls, or continually leave the calls unanswered when you call them in return.
The debt collectors are not allowed to inform the employers about the purpose of the call.
Use of abusive and insulting language is prohibited as per the FDCPA guidelines. The collector also can’t create an emotional unrest situation to collect the debt from you.
Sending letters to debtors that appear to be sent by the Court is also not allowed.
The debt collectors are not allowed to charge interest rates and fees that were not agreed upon by you or your creditor.
Making requests for post dated checks with wrong intentions is also prohibited. There are times when debt collectors wait for a check to bounce so that they get an opportunity to prosecute you.
Filing lawsuit against you in a court which is located away from your place of residence is not preferable.
FDCPA also envisages that a debt collector is not allowed to make false claims that he/she is representing an Attorney, and use any stationery, which appears to be a government or an official court communication.
FDCPA also states that a debt collector cannot collect information about a debtor posing as an official conducting a survey.
A debtor cannot be threatened of being arrested on failure to repay the debt amount. A debt collector cannot harm you physically or use any means of violence or threats to your reputation or property or your family members to collect the due debt.
Dressing in false attire or disguising themselves as government personnel to collect the debt from you. Even they cannot use false paperwork to collect the due debt or manipulate the actual information of the due debt.
Only in case of a minor and/or in your absence, the agency can contact other family members like your spouse, guardian, parent, or executor and administrator. They can’t contact otherwise.
If you have informed the collection agency that you have hired an attorney to deal with your debt cases, then the collector or the collection agency should only contact the attorney, unless the attorney is unavailable for communication and/or the attorney allows direct communication between you and the collection agency.
If you send a written request to the collection agency that they should stop all communications with you and/or you refuse to pay the debt, then they must stop contacting you. But they can inform you once that they are going to take suitable measures against your request.
The collection agency cannot publicly disclose how much debt you owe, or that you are refusing to repay it.
The collectors cannot misinterpret the actual debt amount, the Statute of Limitation for the debt, and/or the creditor’s details.
No collection agency can charge an amount more than the debt’s principal amount and the total interest owed, as agreed between you and the creditor. Doing so is a criminal offense as per the FDCPA.
The collector can neither threaten to take nor seize any of your property if the property has nothing to do with your debt.
In case the agency is trying to collect more than one debt, they need to apply the amount to your chosen debt account.

Steps to take if a debt collector violates FDCPA

It is mandatory that whenever you are approached by a collection agency, then you should send a debt validation letter, within 30 days, to verify that the agency or the collector is licensed or holds the permission to collect the debt from you.

If you find enough reason that supports the activities of the collection agency to be justified, then you should have a talk with the agency to find out a suitable debt payoff strategy.

If you don’t find any reasonable answer or validation from their side, then you can definitely sue the agency in court along with your creditor’s name and wait for the court proceedings to begin.

If it is found that a debt collector has violated FDCPA (Fair Debt Collection Practices Act) norms, you have every right to legally penalize the debt collector in a state court or a federal court. You can check out the FDCPA referral form and fill it out to seek legal assistance against a debt collector. You can sue a debt collector within one year from the time he/she violated FDCPA rules.

If you win the lawsuit, you can make claims for recovering damages you suffered due to debt collectors. In addition to this, you can also make claims amounting to USD$1,000.00. Attorney fees and court costs can also be recovered from the debt collectors if it is found that they have violated the FDCPA guidelines.

What to do or whom to contact in case of FDCPA violation

  • Report it to the Attorney General of your state. You can also approach the Federal Trade Commission or FTC to register your complaints.
  • File a lawsuit against the collection agency on legal grounds and with enough evidence in a State Court, Small claims court, or report such violation to a government agency.
  • Use such violations as a useful tool for debt negotiation with the collector. However, have enough evidence, call records, photographs, and help of an attorney to do that.

    Warning: Some states allow secretly recording of the phone calls. It is legal in the following 35 states in United States - Alabama, Alaska, Arizona, Arkansas, Colorado, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, Wyoming, and Washington DC.

    In the remaining 15 states, there should be a legal consent of both the parties before recording the phone call. Make sure that you have clearly notified the other person about the call being recorded. This will make your legal approach stronger against the unfair debt collection practices.
  • Hire a personal lawyer and file a complaint with the state Attorney General’s office. As often noted by many law firms and attorneys, the collection agencies not only break FDCPA rules but also violate state laws, too.

If it is proved that the collection agency has violated the FDCPA rules, then the collector or the collection agency is liable to pay for any physical damages done to your property or yourself or people associated with you.

The agency might have to pay a compensation cost of upto $1000 depending on the type of action lawsuit filed. On winning the case, you might also be compensated for your attorney’s fees, paperwork, and court fees.

So, whenever your debts are passed onto collection agencies and you believe that the agency is breaking the FDCPA rules, then it is better to take help of attorneys.

What types of debts are covered by debt collectors under the Fair Debt Collection Practices Act (FDCPA)?

Under the FDCPA, a debt collector can cover personal, family, and household debts. This includes debts on personal credit cards, auto loan, mortgage, or a medical bills. The debts taken to run a business is not covered under the Act.

Is it allowed that debt collectors reveal my debt info to my relatives or friends?

Under the FDCPA, the debt collector is suppose to discuss about the debt only with the individual, the creditor, a credit bureau and an attorney who is representing the party concerned. However, if the debt collector doesn’t have your contact details, he/ she can contact family or relatives to know about it. They are not allowed to give details to the relatives about the reason behind contacting you.

Last Updated on: Wed, 26 Aug 2020