To follow up on last week's post regarding the statute of limitations on old debt, it seemed appropriate to write about the law governing the collection of debt - The Fair Debt Collection Practices Act (FDCPA).
The Federal Trade Commission receives more complaints about debt collectors than any other specific industry. The FDCPA establishes what collectors (the law applies to third party debt collectors, not 'in-house' collectors) can and cannot do, prohibiting certain methods of unfair and abusive debt collection practices.
* May not contact you at ‘inconvenient’ times (before 8am and after 9pm) as well as inconvenient places (i.e., employer - so long as they know your employer disapproves) unless you allow them.
* You can cease contact with a creditor by writing a “cease letter” – this will cease contact unless they are notifying you of a specific action (i.e., taking you to court).
* If you have an attorney, let them know. They are then required to contact you through the attorney.
* The debt collector may not contact third parties (families, friends, employer, etc.) except to attempt to locate you.
* Within 5 days of first contact, the collector must send a written notice indicating what is owed, name of creditor to whom you owe the money, and how to dispute the collection.
* Prohibited collection practices include: harassment (threats of violence or harm, publishing a list of non-paying consumers (except to credit bureaus), use obscenities, and repeatedly call on phone), false or misleading statements, hiding their identity, and any other “unfair” practices.
* Consumer has the right to file lawsuit against collector if FDCPA has been violated.
- Reporting FDCPA Violations (State - AG / Federal - FTC)
- Summary of Most Common 2008 FDCPA Violations
* If you have been a victim of a collector that has violated your FDCPA rights, you have the right to sue in a state or federal court within one year from the date the law was violated. The judge can require the collector to pay you for any damages (i.e., lost wages, medical bills/stress, counseling, etc.) as well as require the debt collector to pay you up to an additional $1,000 (even if you can’t prove that you suffered actual damages). You also can be reimbursed for your attorney’s fees and court costs.
NOTE. Even if a debt collector violates the FDCPA while attempting to collect a debt, a 'legitimate' debt will not go away!