Fair Debt Collection Practices Act — The FDCPA
The Fair Debt Collection Practices Act (FDCPA) is an amendment to the Consumer Credit Protection Act. The FDCPA establishes legal protection from abusive debt collection practices. Congress passed the FDCPA to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information’s accuracy.
To enforce the Fair Debt Collection Practices Act congress appointed the Federal Trade Commission (FTC) as the oversight agency. In other words, they are the nation’s consumer protection agency as regarding the Fair Debt Collection Practices Act (FDCPA).
In order to know what debt collectors can’t do it is important to know how the FDCPA defines debt collector. The definition is basic. It is someone who regularly collects debts owed to others. Included in this group are collection agencies, lawyers who collect debts on a regular basis and debt buying companies that then try to collect on this debt.
It is also important to know what type of debt the Fair Debt Collections Practices Act covers. The Act states personal, family and household debts, including money owed on a personal credit card account, an auto loan, a medical bill and your mortgage. What isn’t covered are debts incurred to run or operate a business.
Collection agencies face limitations under the Fair Debt Collection Practices Act in how they can collect personal debts. These limitations do not apply to business owed debts. However, even with business owed debts the collection agencies cannot threaten to do physical harm or use harassing or scare tactics.
Given all this is true what are the collection agencies obligations? The Fair Debt Collections Practices Act prohibits them from using abusive, unfair, or deceptive practices to collect from you. They must contact you in writing, or attempt to do so, before taking any further action to collect a debt, including legal actions to secure payment of the debt;
They are required to identify themselves when contacting you about a collection matter. You have the right to know who they are and who they say you owe as well as the amount.
They must provide information on the original creditor and amount owed as just stated. The original creditor is the company or institution to which the debt was owed before it was transferred to the collection agency.
Collection agencies are not permitted to harass you or your family with threats of harm or violence, use of obscene language or by making calls at unreasonable times of day. In other words calling you at 2 a.m. would be both harassing and calling at an unreasonable time of the day. They cannot do that.
The old days of employing deceptive tactics like by providing inaccurate or misleading information are gone. They must provide accurate information per the Fair Debt Collection Practices Act.
They also cannot send you false legal documents or threaten to take legal action they are not authorized or willing to take. This used to be a favorite deceptive tactic. It is now prohibited.
Debt collectors cannot charge interest or other fees that are not authorized by law. All fees and amounts must be itemized, explained and allowable.
If you have disputed a claim, the debt collector cannot demand payment on an account that you have disputed without providing proof that the debt is legitimate. The Fair Debt Collection Practices Act allows you to dispute a claim.
A debt collector can no longer contact your employer, relatives, friends and neighbors for anything other than your direct contact information. In some instances debt collectors may be permitted to contact employers to verify employment, job title and mailing address but they cannot discuss your particular situation with any of these people.
The Fair Debt Collection Practices Act is available online at the FTC website. It is strongly advised that you take the fifteen minutes necessary to read it. You may just save yourself a ton of legal headaches.
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