A Beginner’s Guide to Fair Debt Collection Practices Act
Life is generally dynamic. Completely unforeseen circumstances can hit anyone at any time. Unfortunately, some of these circumstances are financial crises due to loss of job or income. This can easily make you unable to clear your bills or service some of your loans. But you are not alone in this — thousands of other Americans are going through the same situation as you. Therefore, no need to feel ashamed just because of a debt you owe.
Unluckily, debt collectors can make it harder for you during these unfortunate times. And that is why we're here today: to tell you what your rights are under FDCPA (Fair Debt Collection Practices Act). DoNotPay might just be the perfect solution you have been looking for to stop that merciless debt collector abusing you in calls. Let's get the ball rolling!
What Is the FDCPA?
Abbreviated as FDCPA, the Fair Debt Collection Practices Act is a U.S. federal law enacted in September 1977 by the 95th U.S. Congress. The purpose of the FDCPA is to protect consumers against unruly behaviors by debt collection agencies when chasing debt on behalf of original creditors.
Original creditors, e.g., banks, are not subject to this law except if they operate a debt collection agency under another name. Precisely, the law stipulates the debtor's rights and regulations debt collectors should follow when pursuing the defaulter.
Who Enforces the FDCPA?
The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) jointly enforce the FDCPA.
Below are the CFPB’s contact details:
|Company||Consumer Financial Protection Bureau|
|Mailing Address||Consumer Financial Protection Bureau
PO Box 27170
Washington, DC 20038
|Phone Number||(855) 411-2372|
|Email or Contact Form||Ask CFPB|
Does FDCPA Cover Business Loans?
No. This law covers credit card debts, medical bills, auto loans, mortgages, student loans, and other household debts.
Can I Get Sued by Debt Collectors?
Yes. When you receive a court summons, respond, and show up during the court hearing. Failure to do so can lead to a harsh default judgment in favor of the debt collector.
How Long Can Collectors Chase Me for a Debt?
State debt collection laws limit the time collection agencies can pursue defaulters for a debt. If the statute of limitation on the debt has expired, the debt collector cannot sue you. In some states, they cannot even contact you about the debt.
Common FDCPA Regulations
As a debtor, you have several rights debt collectors shouldn't violate at any given time. But how can you tell they are violating fair practices when you don't know them? So, let's analyze the most common ones.
1. Phone calls
While debt collectors have the right to phone call you, the law restricts when and how. Debt collections cannot reach you:
- Between 9 pm and 8 am without permitting them.
- Contact you at work after informing them verbally or in writing to desist from the same.
- Unceasingly call you with intent to annoy/frustrate you. Collectors cannot also use robocalls with a pre-recorded message.
- After informing them to stop calling. Otherwise, they must cease to reach you about your debt unless when confirming something with you or when telling you about the next steps they intend to take, like filing a lawsuit against you.
In 2019 alone, CFPB received over seven thousand complaints from consumers against various debt collection agencies, many of which were about harassment. But do you know it's illegal for a debt collector to harass you? They should not:
- Use inappropriate/abusive/profane language when communicating with you
- Threaten to beat you or take action which is unlawful for them, e.g., garnishment of your money or laying lien on your property without going through due court process
- Tell you that they can sue you for old debt which its statute of limitation has expired
- Deposit post-dated checks
Debt collectors should respect your privacy and, therefore, must not reveal your debt details to anyone else. The only people collection agencies can legally contact about your debt include your attorney, original creditor (and their attorney), spouse, or parents (if the debtor is a minor). For other categories of people, they can call utmost once and only to inquire of your address or contact.
4. False information
Collections companies have a tendency to use false claims to either intimidate you into paying or gain a monetary advantage. Therefore, the FDCPA prohibits them from:
- Claiming amount more than you owe
- Lying about who they are, e.g., claiming to be government officials or using a fake name
- Falsely report the amount you owe to the credit bureau
What to Do When a Debt Collector Contacts You
When any person reaches you through a call/email/text/mail claiming to be a debt collector, you need first to take precautions. Don't be hasty in issuing your financial or personal information, even if you recognize the debt the person is talking about. Here are some of the steps you can take depending on what you're dealing with.
1. Is the debt collector legit?
You can know this if they can offer correct debt validation information. Under FDCPA, the debt collector should give this information during the initial call or within 5 days. We recommend getting it in writing.
Pro-tip: even if the debt is yours after verification, don't authenticate it with them, promise to pay, or even make a partial payment. This can reset the statute of limitation clock.
2. What if the debt is not yours?
Even though you get a phone call about a strange debt, don't ignore it, as this can hurt your credit report if they report it to the credit bureaus. Instead, send a dispute letter within 30 days claiming that the debt is not yours. They shouldn't contact you again unless they correctly verify it's your debt.
3. What if I don't want to receive calls from the debt collection agency?
Send them a letter by a certified mailer with a return receipt. However, unless the statute of limitation has expired, the debt collector can take further action, including going to court.
4. Can I report a debt collector who has violated my rights?
Yes. You can file a complaint with the FTC, CFPB, or even sue the debt collector in court for damages.
5. I want to pay off the debt
Negotiate your payment plan with the debt collector. Some might even settle for less than the original amount, while others may accept to delete the negative report if you pay.
DoNotPay Can Help You to Deal with Debt Collections Agencies
We have designed the Debt Collection product to help you fight for your rights under the FDCPA without having to do the heavy lifting yourself. DoNotPay can facilitate you to draft any type of letter to a debt collector, as well as forward your complaints to the FTC or CFPB.
Here's how it works:
- Search "debt collection" on DoNotPay.
- Answer a series of questions about the debt collectors, including when you were contacted and how you were contacted, so we can determine if they have violated any debt collection laws.
- Decide which course of action you want to take based on our guidance, such as filing a debt verification request, demanding for the collectors to stop contacting you, or reporting them to the CFPB.
And that's it! Once you choose the course of action you want to take, DoNotPay will handle the rest. We'll deliver your request directly to the debt collectors via first-class mail, or file your complaint automatically with the CFPB so that they're no longer able to use unfair debt collection practices.
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