Few experiences are less onerous than being on the receiving end of debt collection efforts. You may feel anxious every time you go to the mailbox or hear the phone ring. Debt collectors seem to call with threats at all hours. Are there any legal protections against unscrupulous, harassing, or deceptive behavior by debt collectors? Yes, a federal statute known as the Fair Debt Collection Practices Act (FDCPA) limits what debt collectors can do to get payment from you.
Enacted in 1977, the FDCPA is a federal statute that protects consumers by imposing sanctions on debt collectors who engage in certain types of behavior. The stated goals of the FDCPA are to encourage fair conduct in debt collection practices and eliminate abuse by individuals and agencies seeking to recover debts. The FDCPA sets forth rules identifying when and how debt collectors may conduct business. The statute also seeks to provide consumers with tools to ensure the validity and accuracy of an alleged debt, as well as a legal mechanism for disputing incorrect assertions of debt. For situations when a debt collector violates the law, the FDCPA provides remedies for the consumers and penalties for the debt collectors.
Generally, the FDCPA bans debt collectors and debt collection entities from using unfair, deceptive, or abusive practices in an attempt to collect a debt. Among the specific protections afforded by the statute are the following:
Under the FDCPA, a debt collector may call you after 8 A.M. or before 9 P.M. or contact you by text message, email, or regular mail. A debt collector may not talk to anyone but you or your spouse about an alleged debt. When the debt collector contacts you, they must provide the following information:
Under the FDCPA, a “debt collector” is defined to include “any person in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due anothers.” It’s important to understand that the federal law, as written, restricts only the conduct of “third party” debt collectors—it has never been held to apply to individuals who are employees or staff of the “original” creditor, the individual or entity that extended the debt. Nonetheless, a number of states have implemented their own laws that impose the same restrictions and sanctions on in-house debt collectors.
The FDCPA specifically excludes certain types of individuals, including attorneys, from the definition of “debt collector.” In addition, the Act is generally considered to apply only to consumer debt incurred for family, personal, or household purposes. The financial obligations of businesses are not covered by the FDCPA.
The provisions of the FDCPA are regulated and enforced by the Consumer Financial Protection Bureau (CFPB). A consumer who believes a debt collector has violated the law may ask the CFPB to intervene and impose sanctions. Alternatively, a consumer may file a civil lawsuit seeking damages. In such a situation, the debtor does not need to show actual damages, but may recover up to $1,000 plus all reasonable attorney fees, pursuant to the provisions of the FDCPA.
According to statistics gathered by the CFPB, the most frequent citations for FDCPA violations involve:
According to the provisions of the FDCPA, a debtor who can show that a debt collector has violated the law may recover:
Under the FDCPA, consumers are protected from unfair or abusive practices by debt collectors. The provisions of the FDCPA do not, however, apply to business debts. The law prohibits a wide range of conduct, including the use of threats, false statements and harassing behavior, and it regulates when and where a debt collector may attempt to contact a debtor. The statute also allows a debtor to recover actual or statutory damages, as well as attorney’s fees and costs, for any proven violation of the Act.
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