Fair Debt Collection: An Overview of Your Rights

1. Introduction
2. Fair Debt Collection Practices Act
   1. Who/What is a Debt Collector?
   2. How Does the FDCPA Protect Me?
      1. Limits how, when, where contacted
      2. Limits contact with third parties
      3. Prohibits harassment, abuse, intimidation
      4. Prohibits certain false or misleading behaviors
      5. Prohibits unfair practices
      6. Requires debt collectors to give you certain information about your debt
      7. Requires cease collection on disputed debt until verification provided
      8. Limits application of payments made
      9. Limits where suit can be filed
   3. Your Right to Sue a Debt Collector

Introduction

If you're like most people, you try to keep up with your debts, pay your bills on time, and stay within your budget. But, with prices rising for all kinds of basic needs from healthcare to gasoline, cutbacks in employee benefits, and salaries that don't cover the increased costs of living, you, like many consumers, may be finding it harder and harder to avoid going into debt.

For many people, a job layoff or an accident or illness can lead to falling behind in paying bills and the stressful and embarrassing position of having creditors or debt collectors pressuring them for payments they can't make.  Congress has recently enacted a new law allowing credit card companies to double your minimum payments.

If you find yourself struggling with debt, it's important to know there are laws that give you certain rights and protect you from harassment and unethical behavior by debt collectors. The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects all consumers. Most states also have some laws about debt collection, although they may not be as strong as the FDCPA. Where state laws are weaker, you have the full protection of the federal law. If you happen to live in a state with more strict debt collection laws, you have extra protection! 

The Fair Debt Collection Practices Act (FDCPA)

The FDCPA is a very detailed law that specifically outlaws behaviors and practices many debt collectors have traditionally used to try to pressure people to pay outstanding bills. One of the primary goals of the FDCPA is to protect consumers from unfair and abusive debt collection tactics. Such practices are often meant to intimidate, embarrass, and trick consumers into paying debts they don't really owe.

Who/what is a debt collector under the FDCPA?

At first glance, it's easy to assume that the FDCPA protects you from anyone trying to collect payment on a bill. However, that's not true. It only applies to debt collectors, as defined by the law.

In general, the FDCPA defines a debt collector as someone whose main business is collecting debts and who regularly collects debts for other people or companies (in other words, they're not collecting money you owe them, they're collecting money you owe someone else). Not included in the FDCPA's definition of a debt collector are creditors (the person/company you actually owe the money to) and their employees, except in certain situations. A creditor can be held accountable for violations of the FDCPA if he tries to collect his own debts using someone else's name. An example would be a creditor who sends a collection letter using letterhead with the name of an attorney on it, instead of his own name.

Remember, although the FDCPA doesn't apply to creditors, there may be laws in your state that do.

How does the FDCPA protect me?

Basically, the FDCPA makes it illegal for debt collectors to use abusive, dishonest, or unfair methods to collect debts from consumers. It also protects your privacy and reputation. Below is an overview of some of the main debt collection practices the law limits or makes illegal and some of the rights the law gives you as a consumer.

The FDCPA limits how, when, and where a debt collector can contact you without your permission. 

DEBT COLLECTORS CANNOT: 

• Contact you or your spouse at a time or place they know or should know is inconvenient
   
  
• Contact you or your spouse before 8 a.m. or after 9 p.m. in your time zone
   
  
• Contact you or your spouse at work if you tell them not to
  
  
• Send you a postcard about your debt
  
  
• Put language or symbols that might show they're in the debt collection business on the outside of an envelope addressed to you
   
  
• Contact you after you've asked them in writing to stop except to:
  
  
  • Notify you that they're stopping collection efforts
    
    
  • Notify you of action they or your creditor may take against you (by law) to collect the debt
    
    
  • Notify you that they or your creditor plan to take certain action against you (as long as it is an action the law allows and they actually intend to do it -- they can't make false threats)
     
    NOTE: this doesn't mean you don't have to pay a debt you're legally obligated to pay. It simply means the debt collector can't keep writing/calling you about it.

The FDCPA limits what a debt collector can say to other people about you and your debt and what kind of information he can ask for from people who may know you.

• Tell them who he works for, unless they specifically ask
  
  
• Tell the person you owe a debt
  
  
• Contact the person by postcard
  
  
• Contact the person more than once unless they ask him to or he believes they gave him inaccurate or incomplete information which they can now correct
  
  
• Use language/symbols on correspondence to them that suggests he's in the debt collection business or that the letter is about an unpaid debt.

The FDCPA makes harassment, abuse, and intimidation by debt collectors illegal.

DEBT COLLECTORS CANNOT:

• Threaten or use violence to harm you, your reputation, or your property
  
  
• Curse at you or use obscene language
   
  
• Publicly tell anyone that you have an unpaid debt
  
  
• Call you repeatedly to try to annoy or harass you.
   

The FDCPA makes certain false or misleading behavior by debt collectors illegal.

• Give you false or misleading information about your debt
   
• Give you false or misleading information about their services, who they are, their occupation, or who they work for
  
  
• Lead you to believe something they sent you is from an attorney or is some sort of official/legal document, if it's not
  
  
• Threaten certain consequences if you don't pay your debt unless those consequences are legal and they (or your creditor) plan to pursue them (for example, having you arrested, repossessing property, garnishing wages)
  
  
• Threaten to give anyone false information about you or your debt
  
  
• Send documents that give the impression they are NOT legal documents, when they actually ARE (they might do this hoping you won't pay close attention to the document and will miss an important deadline or fail to take an important legal step, which will then allow them to sue you, repossess your property, etc.)
   
  
• Send documents that give the impression you DON'T have to take any action when you really DO.

DEBT COLLECTORS MUST:

• Tell you when they first contact you that they are trying to collect a debt and that any information you give them will be used to do that
  
  
• Tell a creditor they are collecting for that you dispute a debt, if you do.

The FDCPA makes certain unfair/ unethical practices by debt collectors illegal.

DEBT COLLECTORS CANNOT:

• Collect unauthorized or illegal fees
  
  
• Accept a check postdated more than 5 days unless they give you written notice, within a required time frame, that they plan to deposit it
  
  
• Try to get you to write a postdated check in order to use it to threaten you or to file a criminal charge against you
  
  
• Deposit or threaten to deposit a postdated check before the date on it
  
  
• Repossess your property or threaten to do so if they don't have the right and the intention to actually go through with it.

The FDCPA requires debt collectors to give you certain information about your debt.

When first contacting you, or within 5 days of that contact (in which case the information must be given to you in
writing), a debt collector MUST tell you:

• The amount of your debt
  
  
• The name of the creditor you owe the debt to
  
  
• That unless you dispute the debt or any part of it within 30 days, it will be assumed to be valid
  
  
• That if you do dispute the debt within 30 days, the debt collector will get proof of the debt and mail that evidence to you
  
  
• That if you request it in writing, the debt collector will give you the name and address of the original creditor you owed the debt to if it was different from the current one.

The FDCPA requires debt collectors to stop trying to collect a debt which you tell them you don't owe, unless
and until they have verified the debt.

If you notify a debt collector in writing within 30 days that you don't believe you owe a debt or that you want the name
and address of the original creditor, the debt collector MUST stop trying to collect the debt (or at least the part you 
don't think you owe) until they mail you evidence that you owe the debt, or the information you requested about the
original creditor.

The FDCPA limits how debt collectors apply payments you make.

If a debt collector is trying to collect more than one debt from you and you send him a payment, he:

• MUST follow your instructions about which debt(s) the payment should be applied to
  
  
• CANNOT apply your payment to any debt you don't believe you owe.

The FDCPA limits where a debt collector can file a lawsuit against you to collect a debt you owe.

• When you've put up something you own as collateral for a debt, a debt collector can only file a lawsuit against you in a court with jurisdiction where the property is actually located (This keeps debt collectors from trying to sue you in a place that's very inconvenient for you.)
  
  
• If you didn't put up collateral, a debt collector can only file a lawsuit against you in a court with jurisdiction where you live or where you signed the contract.

TIP:

If you get sued and a copy of the contract is not attached to the complaint, the debt collector may be unable to prove the debt is valid. Use this as a defense when you answer the complaint.