Collection agencies have a reputation for being abusive and unethical in how they treat consumers. In fact, there have been so many issues with collection agencies that legislation was passed to address the problem. The Fair Debt Collection Practices Act (FDCPA) was enacted in 1977 to protect consumers from abusive debt collection practices.
Today, collection agencies must adhere to debt collection laws set in place by the FDCPA. Specifically, consumers should know the six main ways the FDCPA protects them from aggressive debt collectors.
The Fair Debt Collection Practices Act is a federal law that protects consumers from debt collection agencies. Before this law, debt collectors had free reign and would often resort to hostile tactics, such as threatening to send debtors to jail.
In 1977, Congress ended these aggressive practices by passing the FDCPA, which limits how often debt collectors can contact debtors. The act also puts more power in the hands of the consumer. Now, a consumer has a clear set of steps they can take when a debt collection agency violates the terms of the FDCPA.
The FDCPA defines a debt collector as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”
Debt collection agencies are businesses that buy past-due debts from an original creditor, such as a bank or credit card company.
The debt collection agencies usually buy the debt for less than it’s worth and then try to collect the outstanding balance from the consumer to get more than their money back. Some agencies handle both private and commercial debt, but the FDCPA only applies to personal debt, not debts that have been incurred by businesses.
The FDCPA gives consumers certain rights and provides standards for acceptable third-party collection behavior. Debt agencies can’t use deceptive, unfair or abusive tactics to coerce you into paying back a debt.
Although the FDCPA clearly details how debt agencies can contact you, it can’t guarantee they’ll always play by the rules. That’s why you need to know your rights, as well as how to respond when they’re violated.
When debt collectors contact you, they can’t harass you. The law prohibits the use of profanity or calling someone excessively. A more recent rule states that debt collectors are limited to calling no more than seven times weekly.
Some other rules put in place around communication between a debt collector and a debtor are:
Unfortunately, this doesn’t always prevent such behavior. But it’s useful to know your rights so you can assert them with any problematic debt collectors. If a debt collector is harassing you, make sure to keep a record of their contact with you in the instance that you need to legally prove their harassment.
The FDCPA specifies that debt collectors must always include disclaimers such as, “This correspondence is an attempt to collect a debt.” Before the FDCPA, collectors weren’t always forthcoming with their purpose for communicating with debtors.
A collections agent must state their purpose right away when communicating with a debtor, whether that communication is written or verbal. Failure to do so is a violation of federal law.
The FDCPA prohibits collection agencies from screaming, threatening or employing violence, using profanity, misrepresenting their identity or hinting at possible imprisonment.
Collection agencies also can’t threaten legal action unless they fully intend to follow through with filing a lawsuit. Threatening to sue is one technique collection agencies have used to scare people, but this isn’t allowed unless legal action is already in motion.
Another way these agencies have historically intimidated consumers is by indicating they have some form of authority to do things like sending debtors to prison, which they can’t do. Collectors are forbidden from using identity misrepresentation, such as sending letters that look like official government correspondence.
The FDCPA permits consumers to formally request in writing that the collection agency cease communicating with them. If you make such a request, the collector is legally obligated to comply.
However, the debt collector is still free to engage the legal system to collect outstanding debts. Additionally, the collector can still contact the debtor in writing, especially if it plans to move forward with legal proceedings.
The FDCPA states a consumer has the right to request further information regarding a debt. This is known as debt validation. It’s important to understand that every consumer has the right to challenge the validity of a debt said to be associated with them.
A collector legally must respond to a debt validation request. Failure to respond to the request means the collection activity must cease and all related consumer reporting must be rescinded. Debt validation is often the first step consumers take when confronting aggressive collectors.
If a collector contacts you about a debt you believe doesn’t belong to you or one you’ve already paid, it’s the collection agency’s obligation to prove the debt is valid.
The FDCPA also limits how debt collectors communicate with others who aren’t the debtor. When contacting those associated with the debtor, creditors:
If a debt collector communicates the details of your debt to a colleague, friend or family member, it’s an invasion of your privacy. Discussing your debts with another party, even if that person is your spouse or immediate family, is a violation of your rights. Collectors can only talk about your debt with yourself or your legal representative.
With the rise of social media, the FDCPA has been updated to protect people’s privacy online as well. A debt collector can’t publicly post on social media about a debt it claims you owe. This is a violation of the FDCPA.
Debt collection agencies can be intimidating, but remember, you have rights under the FDCPA. Debt collectors are legally required to treat you respectfully, protect your privacy and validate your debt at your request.
The FDCPA exists for your protection and helps ensure no company violates the law. If you believe your rights under the FDCPA have been violated, it’s a good idea to contact a consumer law attorney in your area to help you.
You can also submit a complaint to the FTC or Consumer Financial Protection Bureau (CFPB). Keep a record of all your interactions with debt collectors. Remember, you do have rights as a consumer, and you don’t need to be alone in your financial struggles.
Lexington Law Firm can help you review your credit report. If you have negative items on your report that shouldn’t be there, let us work to address them for you. Your right to a fair and accurate credit report is just as important as your right to fair debt collection practices.