Regulatory Limitations Faced by Collection Agencies

Debt collection agencies aren’t exactly thrilled to reveal what they’re not allowed to do under The Fair Debt Collection Practices Act. Instead debt collection agencies may be more likely to avoid mentioning, explaining, or acknowledging the existence of such legislation in a possible attempt to place pressure on those persons who they are trying to collect money from. Consumer protection law is available to the public under Title 15, chapter 41, sub-chapter 5 of the U.S. Code.(1)

Being aware of what these rules disallow certain practices within debt collection, in regard to debt collection agencies can assist people in debt know their rights when their debt is passed to a debt collector. These rights help empower debtors in so far as the law allows, and does so for the purpose of protecting debtors from harassment, manipulation, threat and danger.

• Debt collection agencies can’t violate your privacy

According to the privacy rights clearinghouse, debt collectors cannot leave pre-recorded voice mails on cellular phones if a cell phone was not given on a credit application.(4) Debt collectors are also not allowed to leave messages with third parties as per Title 15, chapter 14, subchapter V, section 1692c of the U.S. Code. the Privacy Rights Clearinghouse.

• Communication from debt collection agencies can be terminated

A debt collector can be asked to cease contact with the provision they are allowed one additional communication to notify a debtor of the collection effort thereafter. This does not mean one no longer owes debt, but it does mean that particular collection agency is obligated to cease communication following the defined contact prescribed by law.

•  Misrepresentation of debt, business, legal and individual communication

Debt collection agencies must act honestly with their communications so as to avoid coercing, manipulating, harassing or lying to the debtor, all of which are illegal. The debt collector is required to disclose the purpose of their initial communication and may not mislead or contact the debtor before 8:00AM or after 9:00PM in that debtor’s time zone.(1)

• Collection fees and assets are prohibited unless authorized

A debt collection agency may also neglect to mention the unfair practice provisions of the aforementioned statutory law. This includes unauthorized collection of debt owed and associated fees as well as personal property. By unauthorized one means as made through agreement with the collection agency or as allowed through other regulatory laws.

• Disclosure of identity

If a debt collection agency calls a debtor directly, they are required to provide “meaningful disclosure” of their identity.(1) This means a debt collector  cannot telephone a debtor anonymously and provides the debtor an opportunity to communicate his or her wishes regarding the conduct of the debt collector.


Debt collection agencies are limited in their range of conduct by statutory law. Being aware of this law is something debt collectors may not want you to know because it empowers consumers and debtors, possibly to the disadvantage of the debt collector.

If debtors are unaware of these laws and how a debt collection agency must conduct itself, this can place clearer restraint on the actions, and communications of debt collectors so as not to seek out or utilize less than savory debt collection methods.


1) (Cornell University: Title 15, Chapter 41 U.S. Code)
2) (Federal Trade Commission (FTC): Consumer guide)
3) (FTC: Consumer credit)
4) (Privacy Clearinghouse)