What is the FDCPA and What Does It Do?
In 1978, the Congress of the United States enacted the Fair Debt Collection Practices Act (or FDCPA) because of the abusive and deceptive manner that many debt collectors use to collect consumer debt. It is designed to protect natural persons (so you as an individual, not businesses) from unfair practices. In its essence, it is a consumer protection law. It also protects a reputable debt collector from unfair competition.
Initially, the Federal Trade Commission enforced the FDCPA, but under the Dodd-Frank Act from 2010 (which amended the initial law) the Consumer Financial Protection Bureau was given that right.
Definitions of Consumer Debt and Debt Collector
Under this law, consumer debt is incurred by personal, family, or household transactions. In other words, if your corporation or business owes a debt, how it is collected is not governed by the FDCPA, but by other federal or state laws. Credit card debt, student loans, medical bills, mortgages, and similar are protected.
A debt collector is “any person who regularly collects, or attempts to collect, consumer debts for another person or institution or uses some other name other than its own when collecting its own consumer debts.”
In short, a debt collector is a third party that collected debts on behalf of the person you owe money to. This means that if you owe money to your local baker and they try to get their money back personally, the FDCPA doesn’t regulate how it is done.
What are the Practical Applications of the Fair Debt Collection Practices Act?
As this law is intended to guard natural persons from debt collectors, it allows you certain protections from any collection practices which could be considered harassment. A collection agency still has the right to collect their debt, but the manner in which they do it must not be abusive. Otherwise, you can report them or initiate private legal proceedings before a court.
The FDCPA Protects You From Harassment
The FDCPA doesn’t allow collectors to harass you. You are protected from debt collectors using abusive language, threatening you with violence, or claiming they can arrest you. Usually, they can try to contact you at home or contact your workplace, but you can tell them, verbally or in writing, where and when they can contact you and they must respect it.
The FDCPA Regulates the Time-Frame When a Collection Agency Can Contact You
Under the Fair Debt Collection Practices Act, a debt collector cannot call you at inconvenient hours. They are only allowed to call you between 8 a.m. and 9 p.m. You can arrange a phone call with the debt collector outside those hours, but it must be at your behest.
Additionally, you can demand not to be contacted between 8 a.m. or 9 p.m. either. If you make it clear that you work at night and sleep during the day, the debt collector must respect your wishes not to be bothered.
You Can Stop All Communication
If you have a lawyer, all communication can be done through them and the debt collector cannot continue to harass you. You can even inform the collector, via written notice, that you don’t intend to pay the debt and to stop contacting you. Basically, it is your right to stop any and all further communication.
In such cases, the only reason they are allowed to contact you again in any form is to inform you that they will no longer be trying to collect the debt, or that the collector plans to take legal action before a court.
It Prohibits Disclosure of Your Information to a Third Party
Sometimes, when they can’t find your phone number or address, collectors try to contact your friends, neighbors, or relatives to get that information. While they are allowed to do this, under the FDCPA they can only do it once for each person and they are not allowed to disclose anything about the debt, or that they are debt collectors at all. They can only discuss the debt with you, your spouse, or attorney.
Debt Collectors Must Identify and Give Appropriate Information
In any communication with you, they must identify themselves as a debt collector and state why they are contacting you. They must also provide you with the name and address of the original creditor when you ask for it via written notice.
Additionally, the debt collector must notify you of your right to dispute the debt. You can send a dispute letter and they must either verify the debt via mail (within 30 days of receiving your letter) or cease with the collection.
You Can Sue Collectors Under The FDCPA
The Consumer Financial Protection Bureau enforces the FDCPA, but you are within your right to take a debt collector to court. If any of the provisions of the law are broken, you have the right to initiate a lawsuit individually, or as part of a collective lawsuit.
Before you take any action, it is always wise to have a credit analyst look over your credit report and consult with a credit attorney. If your lawsuit is unsuccessful, you could find yourself in a worse position than you started off with.