Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) was passed in 1978 as part of the Consumer Credit Protection Act.  The FDCPA puts restrictions on how debt collectors may seek to collect on debts, and it gives consumers certain rights in relation to debt collectors.

The FDCPA is a federal law, and thus it establishes a minimum standard that all states must honor.  But states are free to – and some have – institute more stringent regulations.

The FDCPA applies to personal, not business, debts, including debts associated with mortgages, automobiles, medical bills, credit cards, and more.

An important distinction is that the FDCPA only applies to debt collector businesses, including attorneys.  That is, if Sears is after you for not paying your bill, and they use only their own in-house debt collectors or attorneys, the FDCPA does not apply (though of course there are other laws that do).  But if they hire a third part collection agency to go after you, then the FDCPA comes into play.

If you notify the collection agency in writing that you dispute the charge, then they may not contact you again unless and until they can produce proof of the charge.  If you notify them in writing that you do not want them to contact you again (without necessarily disputing the charge), they may contact you only once more, to inform you what action they or the creditor intend to take.  If you notify them in writing to deal exclusively with your attorney, they may not contact you again but must from that point contact your attorney only.

Within five days of their first contacting you, a collection agency must send you a written notice that includes the name of the creditor and the amount of money it is claimed you owe.  It must also include that you have thirty days to dispute the charge, that if you do so they must obtain proof of the debt and provide it to you, and that if you request it within that thirty day period they must provide you with the name and address of the original creditor if it differs from the current creditor.  In addition, on that and every subsequent written communication, they must provide a Miranda-like warning that they are acting as a debt collector and that anything you communicate to them may be used to facilitate their collecting from you.

The FDCPA prohibits a collection agency from doing any of the following:

* Threatening that you will be arrested if you don’t pay them.

* Threatening you with actions they do not intend to take.  So they can warn you they are going to sue you, warn you they are going to report the debt to credit bureaus and harm your credit, etc., but only if they really are going to.  They can’t bluff.

* Lying to obtain information or influence you to pay.  (A popular tactic in the old days was to call to let you know a loved one had been rushed to the emergency room, and when you arrive there distraught, they meet you to inform you there was no accident but that they will continue to do such things to stop you from avoiding them, until you pay up.)

* Calling you frequently enough to be harassing, or calling you before 8:00 AM or after 9:00 PM.

* Calling you at an inconvenient time and place.  For instance calling you on your cell phone when you’re at your child’s school for a PTA meeting, or calling you at work when they know you’re not allowed to receive non-work-related calls.

* Contacting a third party about your debt, such as an employer, friend, neighbor, relative, etc.

* Using stationery or envelopes designed to mislead that they are coming from a court or official government source, or that makes it appear they are attorneys (if they are not).

* Using obscenity, racial slurs or insults in their communication with you.

* Telling you to send post-dated checks with the intention of prosecuting you if they bounce.

* Suing you in a court inconveniently far from your place of residence.

* Adding collection fees or interest charges not permitted by your contract or by the law.

Unfortunately, the number of people who even know the FDCPA exists is tiny, so people continue to be harassed by collection agencies, even though they could quickly put a stop to it if they knew how.