FAQs on Debt Collection Laws
Here are answers to frequently asked questions about debt collection.
What is a creditor?
A creditor is someone who is owed a debt by a consumer, if the debt originates from a transaction that took place during the ordinary course of the creditor’s business.
What is a consumer collection agency?
A consumer collection agency is hired by creditors to collect debts on their behalf.
What debts are covered under the Fair Debt Collection Protection Act?
Fair debt collection laws cover personal, family and household debts, including credit card debts, child support and money owed to a municipality for personal property tax.
How may a consumer collection agency contact you?
A collector can contact you in person, by mail, telephone, telegram or fax. A collector may NOT contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you have specifically agreed to be contacted at that time. If you inform a collector that you have an attorney, the collector MUST contact the lawyer rather than you.
Can a consumer collection agency call you at work?
Yes. However, if the collector believes that your employer may not approve of this communication, then they must stop calling. In addition, you can personally request that a consumer not call you at work.
Can a consumer collection agency communicate with anyone else about your debt?
A collection agency may not contact anyone about your debt besides you, your attorney, a credit agency, the creditor or the creditor’s attorney. They cannot contact friends, roommates, co-workers, family or former spouses.
The only time collection agency can contact other people to find out your address, what your phone number is, and your employer, and they may only contact them one time. They can not mention that you owe any debt.
In terms of mail, to protect your privacy, debt collectors may not send post cards, and they may not use any language or symbol on the envelope to indicate that the communication relates to the collection of a debt.
Can you stop a consumer collection agency from contacting you?
You can stop a collector from contacting you by sending a certified letter to the collection agency. Once they receive the letter (and make sure you receive confirmation from the post office that they have received the letter), they may not contact you again, except to confirm there will be no further contact or to notify you that the agency, or to inform you that the creditor intends to take certain specific actions. Please note: sending such a letter does NOT make your debt go away if you actually owe it. You can still be sued by your original creditor.
What must a consumer collection agency tell you about the debt?
Within five days after you are initially contacted by a collection agency, they must send you a written notice that contains the following information:
- the amount of the debt;
- the name of the creditor to whom you owe the debt;
- a statement that unless you dispute the validity of the debt within 30 days after its receipt, the agency will assume the debt is valid;
- a statement that if you notify them in writing within that 30-day period that the debt is disputed, then the consumer collection agency will mail you proof that you owe such debt; and
- a statement that informs you that you may request – in writing and within that 30-day period – the name and address of the original creditor, if different than the current creditor.
- What types of debt collection practices are prohibited?
Consumer collection agencies may NOT harass or abuse you or any third parties they contact. For example, consumer collection agencies may not:
- use threats of violence or criminal means to harm you, your reputation or your property;
- use obscene language;
- publish a list of consumers who refuse to pay their debts (except to a credit rating agency);
- advertise the sale of your debt in order to coerce payment;
- repeatedly use the telephone to annoy, abuse or harass someone; or
- place telephone calls to you or your attorney without disclosing the caller’s identity.
- False or misleading representations
Consumer collection agencies may not use any false, deceptive or misleading statements when collecting a debt. For example, consumer collection agencies CANNOT:
- falsely imply that they are attorneys or government representatives;
- misrepresent the character, amount or legal status of your debt or any services or compensation that may be received for the collection of your debt;
- falsely represent or imply that a sale, referral or other transfer of any interest in the debt will cause you to lose any claim or defense to payment of the debt or become subject to any prohibited practice;
- falsely imply that you have committed a crime;
- communicate or threaten to communicate false credit information;
- send you anything that looks like an official document from a court or government agency when it is not;
- use deception as a means to collect your debt or obtain information about you;
- fail to clearly inform you that any information obtained will be used toward collection of your debt;
- falsely imply that accounts have been turned over to innocent purchasers for value;
- indicate that papers being sent to you are legal forms when they are not;
- indicate that papers being sent to you are not legal forms when they are;
- use any name other than the true name of their business, company or organization; or
- falsely represent that they operate or work for a credit bureau.
Consumer collection agencies also CANNOT state that:
- you will be arrested if you do not pay your debt;
- they will seize, garnish, attach or sell your property or wages, unless the collection agency or creditor intends to do so and it is legal to do so; or
- actions, such as a lawsuit, will be taken against you when such actions legally may not be taken, or when they do not intend to take such action.
Consumer collection agencies may not engage in unfair practices when they try to collect a debt. For example, collectors may not:
- collect any amount greater than your debt that is not expressly authorized by the agreement creating the debt;
- accept a check postdated by more than five days unless they notify you that they intend to deposit the check between three and 10 days before the intended date of deposit;
- deposit a post-dated check prematurely;
- use deception to make you accept collect calls;
- take or threaten to take your property unless this can be legally done;
- contact you by postcard; or
- use any language or symbol other than their address on an envelope that would indicate that the communication is about a debt.
- Can a consumer collection agency continue to contact you if you believe you do not owe money?
If, within 30 days after you receive the written notice, you send them a letter stating you do not owe money, the collection agency must stop contacting you. However, a collector can renew activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
What control do you have if you have multiple debts?
If you owe more than one debt, you must indicate which debt you are paying toward each time you make a payment. A consumer collection agency may not apply a payment to any debt you believe you do not owe.
What can you do if you believe a consumer collection agency has violated the law?
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney’s fees also can be recovered. A group of people also may sue a consumer collection agency and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever is less. THERE IS NO COST TO HIRING A LAWYER.
FOR MORE INFORMATION, CALL 1-800 NOT FAIR.
source: Consumer Collection Practices