Fair Debt Collection Practices Act (FDCPA): Know Your Rights
The Fair Debt Collection Practices Act (FDCPA) of 1977 (subsequently amended) regulates collection agencies’ conduct towards consumers.
It is important to note that this DOES NOT regulate creditors or their internal collections departments, but only collection agencies or any lawyer who is performing a collection function.
The Federal Trade Commission (FTC) wrote the FDCPA and also enforces the rules. Any violation should be reported to the FTC along with the Consumer Financial Protection Bureau (CFPB). A form will be sent to you and upon receipt the FTC will do an investigation. A collector can be sued and fined up to $1,000 for each violation plus all of your attorney fees. The consumer can sue the collector directly up to one year from the time of the alleged violation. The FTC can be reached toll-free at 877-382-4357.
The FDCPA specifically prohibits many activities. The following are most common:
- A bill collector cannot call you before 8am or after 9pm, or at any inconvenient time. For example, he/she cannot call you in the hospital. You can be called once a day; you can be called on weekends.
- It is legal for collectors to call you at work. However, if you inform the collector that the calls are jeopardizing your job, then the calls must cease. You can write a letter to the collection agency asking them to stop calls and letters. Subsequent calls or letters are then illegal. Always send letters by certified mail/return receipt requested.
- It is legal to contact you again if they are going to take legal action.
- It is also illegal for the collector to discuss your debt with a third party other than your spouse without your written or verbal permission, except to leave a message that he is trying to contact you.
- The use of profanity is illegal.
- The collection agents cannot misrepresent themselves. For example, he/she cannot say he is an attorney if he/she is not, nor can they pretend to be an old college friend if they are not.
- Collectors cannot make false threats. If a collector says he is going to take a specific action against you to enforce the debt, he has to do it. Collectors can, however, infer action and state their legal rights by prefacing their language with "may", "could" or another similar word.
- Within five days of the first telephone contact, a letter must be mailed to you at your last known address giving you information about your account and a chance to dispute the validity of the debt. A dispute must be made in writing, and collection activities have to stop until the debt is verified.
- If you have retained an attorney, the collector must communicate with him/her until the attorney's services are no longer being used.
It is important to be aware of your rights. One of the best ways to avoid problems is to communicate honestly with collectors and develop a realistic plan (one that is both acceptable to the collector and financially feasible for you) to repay the debt.
Revised January 2016.