Debts, Debt Collectors and Your Rights

After years of consumers being treated unfairly in loan and debt collection matters, Congress enacted a series of laws designed to protect consumers in their credit transactions. The statute which addresses the collection of a debt is known as the Fair Debt Collection Practices Act which requires that anyone attempting to collect a debt from an individual treat that individual (the “debtor”) fairly. The Act also prohibits certain methods of debt collection. The citation to the Act is 15 U.S.C. §1692-1692o 

What Debts Are Covered?

The Act applies only to debts which are created as a result of transactions involving person, family, or household matters, which, essentially means consumer debt, but not business debts. It includes debts on charge cards, gym memberships, cars, insurance, medical care and similar items.

Does the Act Apply to All Bill Collectors?

The Act defines a debt collector as any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis, but does NOT include the person or company that you owe the money to.

What Can a Debt Collector Do?

A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

What Can’t a Debt Collector Do?

Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, debt collectors may not use threats of violence or harm; use obscene or profane language; or repeatedly use the telephone to annoy someone.

Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors cannot falsely imply that they are attorneys or government representatives; they cannot falsely imply that you have committed a crime; they cannot represent that they operate or work for a credit bureau; they cannot misrepresent the amount of your debt; and they cannot tell you that papers being sent to you are legal forms when they are not or that papers being sent to you are not legal forms when they are.

Debt collectors also may not say that you will be arrested if you do not pay your debt (you cannot be arrested for not paying a debt); they cannot tell you that 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; they cannot tell you that legal action will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.

Debt collectors may not give false credit information about you to anyone, including a credit bureau;

send you anything that looks like an official document from a court or government agency when it is not; or use a false name.

Debt collectors 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, unless your state law permits such a charge; deposit a post-dated check prematurely; use deception to make you accept collect calls or pay for telegrams; take or threaten to take your property unless this can be done legally; or contact you by postcard.

Can I Stop a Debt Collector From Contacting Me?

You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. You could still be sued by the debt collector or your original creditor.

Can a Debt Collector Contact Anyone Else About Me?

A debt collector can contact other people, but only to find out where you live, your telephone number, or where you work. In most instances, they cannot discuss your debt with a third person. Additionally, if you have an attorney, the debt collector must contact the attorney, rather than you.

I Don’t Think I Owe This Money, What Does the Debt Collector Have to Tell Me?

Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

What can you do if you believe a debt collector violated the law?

You can sue a debt collector in a state or federal court within one year from the date the law was broken. 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 debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

Where can you report a debt collector for an alleged violation?

Report any problems you have with a debt collector to your state Attorney General's office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General's office can help you determine your rights.

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