What is the Fair Debt Collection Practices Act?

What is the Fair Debt Collection Practices Act?

Posted on March 2, 2012 by Jennifer in Credit Card Debt, Credit Card Tips

Debt collectors sometimes push the boundaries of acceptable behavior when trying to collect debts they claim are owed. Because of that, we have something in the U.S. known as the Fair Debt Collection Practices Act, or FDCPA. Let’s explore the basic purpose of the FDCPA and how it can protect you as a consumer from the less ethical debt collectors out there.

The Purpose of the Fair Debt Collection Practices Act

The FDCPA exists because of the actions some debt collectors have used over the years. In essence, they would harass or threaten consumers (some of whom did owe money and others who didn’t necessarily owe what was claimed). The FDCPA places limits on debt collection acts to stop them from crossing that line into harassment. And it gives consumers recourse when collection agencies don’t follow the rules.

How the FDCPA Helps You

If you owe a legitimate debt, by all means, you should do everything in your power to pay it. You may be able to work out new payment terms before it even goes into collections. But even if you’re in over your head, that doesn’t mean a collection agency can harass you. And if you’re being hounded about debts you don’t owe (such as resulting from identity theft or calls you’re getting for the previous user of your phone number), you too have protections.

Here are some of the ways the FDCPA directly helps consumers in either of these situations:

  1. It limits the times debt collectors may call you, and they cannot call at any time you tell them is inconvenient for you (such as during the day if you work nights and sleep through the morning hours).
  2. It forbids collection agencies from telling others about your alleged debts. In other words, they can’t post a notice on your door that would tell neighbors you owe money and they can’t talk to a roommate or family member on the phone about your debt.
  3. It forbids collection agents from using threatening or obscene language when they call to speak to you. They’re not allowed to use those methods to try to intimidate you into making a payment.
  4. It requires them to let you know who they are and why they’re contacting you. For example, they can’t call pretending to be something other than a collection agent in an attempt to get information out of you.
  5. It allows you to demand validation of a debt a collection agency claims that you owe. Until they validate that debt, they aren’t supposed to contact you about it again (so always send requests via certified mail with return receipt to prove they received it). This is especially handy if the debt isn’t really yours or if you previously paid the debt and it was sold to a collection agency in error.
  6. It allows consumers to sue debt collectors who choose not to abide by the laws. You may be awarded any actual damages. And the debt collector may also be required to pay a statutory penalty up to $1000.

This is just a quick primer on the FDCPA and what it means for consumers like you. You should review the details of the Act more thoroughly if you’d like to learn more, through the Federal Trade Commission’s FDCPA publication.

Disclaimer: The author is not a legal professional and this article is not meant to serve as legal advice. It is for informational purposes only. If you need legal advice related to debt collection and the Fair Debt Collection Practices Act, please consult a licensed attorney.