The debt collection industry can be quite brutal and abusive in their practices that the Federal Government sought ways to help debtors escape harassment and the stress of being deep in debt. This is part of the Consumer Credit Protection Act.
If you are deep in debt and you are unable to pay for your loans, you can expect to hear from your creditors and their respective collection agencies soon enough. While the government does not prohibit them to force you to pay, they imposed strict rules to keep the collection from turning ugly. You are not freed from your responsibility to pay your obligations but that does not give them the right to abuse you for your inability to pay.
About the Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act or the FDCPA has three main goals: (1) stop abusive practices of debt collection; (2) encourage fair collection of debt; and, (3) create a gateway wherein consumers and debtors can voice out complaints against collectors and creditors violating this law.
This act covers all collectors – whether they are part of the creditors organization/company or a separate entity. While the general idea is the same, some States have additional consumer protection laws implemented in their own jurisdiction.
The FDCPA does not cover all types of debts. This only involves debts between an individual consumers and a professional lending or credit company. This includes financial institutions with departments holding the same function. Any debt between family members are not covered. The same is true for businesses and debts acquired by the same.
Know Your Right Against Abusive Debt Collectors
The FDCPA continues to enumerate how debt collectors should conduct themselves when transacting with debtors and consumers. Here are two groups that states how they should and should not act.
Debt Collection Best Practices
- Debt Collectors should properly identify themselves – especially during the initial contact. They should indicate their name, designation, the collection agency, and the creditor they are representing. The name and address of the creditors must be provided.
- The collector should indicate the amount of debt that they are tasked upon to collect.
- The collector should send a written letter containing the details of the collection (everything written in number 1 and 2). If the call is made first, the written letter must be sent within 5 days.
- The consumer must be informed of their rights – either to file a dispute if there are errors on the debt or request for verification. The error can be a wrong amount or being the wrong debtor altogether. The consumer should be informed that they have 30 days from the receipt of the letter to file the said dispute or request.
- The collector should respond accordingly through mail when the debtor files a dispute, or even a request. That response could contain the verification requested or the confirmation to cease collection.
- The collector should honor any request by the debtor to cease collection or communication – regardless if the debt is correct or not. They need to send a final notice to the debtor to inform them that the request will be honored and certain legal actions will have to be pursued.
- The collector is only allowed to file a lawsuit where the debtor lives or where the contract is signed – at least when the situation calls for a legal action to be taken.
Debt Collection Prohibitions
- The debt collector calls the debtor outside 8am and 9pm. This is not allowed and should follow the debtor’s local time.
- The debt collector continues to call and send letters to the debtor even after they requested that the communication should stop. The collector should honor the wishes of the debtor and stop communicating. The only time that they are allowed to communicate is to tell the debtor to say that the request was acknowledged and either they have contacted the wrong debtor or they will pursue legal actions.
- The collector calls the debtor repeatedly and continuously. This is harassment and should not be done.
- The collector calls the debtor at their workplace. If the debtor requests that they should only be called at home, the collector should follow suit.
- The collector communicates directly with the debtor even if they are represented. If the debtor has an attorney to handle matters for them or even a debt relief expert, all matters should only be coursed through the representative.
- The collector continues to communicate with the debtor prior to the submission of verification. If the debtor requested for a verification, the collector should only resume communication after they have submitted what was requested.
- The collector pretends to be a lawyer or a law enforcement officer. Deceit or any form of misrepresentation is strictly prohibited.
- The collector puts the name of the debtor on the “bad debt” list.
- The collector requests for unjustified amounts. The collection should only include what the debtor owes the original creditor.
- The collector threatens the debtor with a legal action or arrest. This is not allowed unless this is the next step to be done by the collector.
- The collector uses profane and abusive language. Any form of communication should always be courteous and respectful of the debtor.
- The collector calls other people close to the debtor about the debt. Unless it is the spouse or the authorized representative, the collector is not allowed to call or get in touch with anyone other than the debtor. If the collector is unable to find the debtor, they can call neighbors or coworkers but only to get the new contact details and should never divulge the debt problem.
- The collector uses other forms of communication other than mail or phone call.
- The collector places false information on the credit report of the debtor. Even the mere threat of doing so is prohibited.
To report a debt collector who violated your rights, get in touch with the office of your State’s Attorney General and the FTC.
If you wish to know more about the FDCPA, the FTC posted a Guide for Consumers.
You can also view the other Debt Relief Laws that will guide and inform you of your rights as a consumer and debtor.
NationalDebtRelief.com is here to help you take control of your debt and make sure your rights are protected. Give us a call and we will assign a debt relief expert to help you through this financially challenging time in your life.