Debt Collections and Your Rights
Fair Debt Collection Practices Act Summary
The Fair Debt Collection Practices Act (FDCPA) is a United States statute added to Title VIII of the Consumer Credit Protection Act in 1978
It is aimed at
- Eliminating abusive practices in the collection of consumer debts
- Promoting fair debt collection
- Providing consumers with an avenue for disputing and obtaining validation of debt information to ensure its accuracy
- Creating guidelines for debt collectors in conducting business
- Defining the rights of consumers dealing with debt collectors
- Prescribing penalties and remedies for violations of the act.
- Being used in conjunction with the fair credit reporting act
The Fair Debt Collection Practices Act (FDCPA) prohibits following practices among the debt collectors collect while dealing with collecting consumer debt:
- Abusive conduct
- Contacting consumers by telephone before 8:00 a.m. and after 9:00 p.m.
- Communicating with consumers after receiving written notice that the consumer wishes no further communication or refuses to pay the alleged debt
- Calling on telephone conversation repeatedly/continuously: with the intent to annoy, abuse, or harass
- Communicating with consumers at their place of employment despite being advised against it by the employer of the consumer
- Contacting consumer represented by an attorney
- Communicating with consumer after request for validation/verification of a debt and for the name and address of the original creditor on a debt
- Communicating with consumer before the debt collector mails the consumer the requested verification or original creditor’s name and address
- Misrepresenting the debt or
- Claiming that he or she is an attorney or law enforcement officer
- Publishing the consumer’s name or address on a “bad debt” list
- Seeking unjustified amounts not permitted under an applicable contract and law
- Threatening arrest or legal action that is neither permitted nor contemplated
- Abusive or profane language used in the course of communication related to the debt
- Revealing or discussing the nature of debts with third parties or threatening such action
- Contacting by embarrassing media, regarding a debt by post card, or using any language or symbol, mails or by telegram, indicating that he is in the debt collection business
- Reporting false information on a consumer’s credit report or threatening to do so in the process of collection
Further, the FDCPA requires debt collectors to:
- Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector
- Inform in the initial communication that any information obtained will be used to effect collection of the debt
- Give the name and address of the original creditor upon the consumer’s written request made within 30 days of receipt
- Notify the consumer of their right to dispute the debt, in part or in full, with the debt collector
- The 30-day notice is required to be sent by debt collectors within five days of the initial communication with the consumer
- If a consumer sends a written dispute or request for verification the debt collector must either mail the consumer the requested verification information or cease collection efforts altogether
- A debt collector may file a lawsuit, if at all, only in a place where the consumer lives or has signed the contract
Enforcement of the FDCPA
The Federal Trade Commission has the authority to administratively enforce the FDCPA using its powers under the Federal Trade Commission Act.
Aggrieved consumers may also file a private lawsuit in a state or federal court to collect damages (actual, statutory, attorney’s fee and court-costs) from third-party debt collectors to claim statutory damages of up to $1,000 plus reasonable attorney fees if a debt collector is proven to have violated the FDCPA.
Alternately, if the consumer loses the lawsuit and the court determines that the consumer filed the case in bad faith and for the purposes of harassment, the court may then award attorney’s fees to the debt collector.