Consumer Protection

What Is the Law on Debt Collections?

By Amy Loftsgordon, Attorney
The federal Fair Debt Collection Practices Act (FDCPA) and some state laws protect consumers from abusive, overly-aggressive debt collectors.

The main federal law that governs debt collection practices is the Fair Debt Collection Practices Act (FDCPA). This law prohibits debt collectors from using abusive, unfair, or deceptive tactics when trying to collect from you.

If you’re dealing with an aggressive debt collector, you should know what the collector can and can’t do when trying to get you to pay up. This article covers some of the more significant FDCPA restrictions, as well as what you can do if a collector violates the law.

Who and What Does the FDCPA Cover?

The FDCPA applies to debt collectors, but generally not to original creditors collecting their own debts. However, a creditor that collects its own debts under a different name must comply with this law. Also, state law might have requirements similar to the FDCPA for creditors.

Under the FDCPA, the term "debt collector" includes someone who regularly collects debts for others or whose primary business is collecting debts. So, debt buyers that purchase—and therefore own—the debt they’re trying to collect generally aren’t subject to the FDCPA. (See Henson et al. v. Santander Consumer USA Inc., 137 S.Ct. 1718 (2017)). But the FDCPA can apply to a debt buyer if the business's principal purpose is the collection of debts. (See Tepper v. Amos Financial, LLC, 898 F.3d 364 (3rd Cir. 2018)). (To learn more, read Does the Fair Debt Collection Practices Act Apply to Debt Buyers?)

The FDCPA applies to debts incurred primarily for personal, family, or household purposes—like delinquent credit card accounts, overdue car loans, past-due medical bills, a delinquent mortgage loan, and defaulted student loans. But the law doesn’t cover business debts.

Illegal Conduct Under the FDCPA

The FDCPA prohibits collectors from engaging in harassing conduct, like:

  • Communicating with you at unusual or inconvenient times or places, like early in the morning or late at night. A debt collector can assume that the times between 8:00 a.m. and 9:00 p.m. (in your time zone) are convenient, but if the collector knows you work a night shift, then daytime contact is considered inconvenient.
  • Communicating with your relatives, employers, friends, neighbors, or others about your debt without your permission. (A collector can contact others about your debt, but only to locate you and can’t talk about the debt).
  • Contacting you directly if you’re represented by a lawyer, unless your lawyer doesn’t respond within a reasonable amount of time or if you consent to direct communication with you.
  • Falsely representing the character, amount, or legal status of a debt.
  • Using language or symbols on envelopes or postcards that indicate the debt collector is in the debt collection business or that the communication relates to the collection of a debt.
  • Calling you at work if the collector knows or should know that your employer prohibits such calls.
  • Using obscene or profane language, like racial slurs, insulting remarks, or threats of violence against you.
  • Failing to disclose in communications that the collector is attempting to collect a debt.
  • Calling you repeatedly with the intent to annoy, abuse, or harass you, like calling multiple times per day over many days or at unusual hours.
  • Falsely stating or implying that any individual is an attorney or that any communication is from an attorney.
  • Depositing or threatening to deposit a post-dated check before the date on such check.
  • Threatening arrest, garnishment, or seizure of property or wages, unless such actions are lawful, and unless the collector fully intends to take such action.
  • Collecting fees or charges the collector is not entitled to collect under the agreement creating the debt.
  • Creating the false impression that the collector is affiliated with or is an agent of the government.

Required Conduct Under the FDCPA

Under the FDCPA, if you make a request in writing, the collection agency must stop communicating with you, other than to let you know that it’s ending communication, or it may (or will) sue you or use another legal remedy to collect the debt.

Also, a debt collector must send you a written notice within five days after its initial communication (or in the initial communication), which includes information about the debt, like:

  • the amount of the debt
  • the name of the creditor to whom the debt is owed
  • a statement that unless you, within 30 days after receipt of the notice, dispute the validity of the debt, or any portion thereof, the debt collector will assume the debt is valid
  • a statement that if you notify the debt collector in writing within the 30-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against you and a copy of such verification or judgment will be mailed to you, and
  • a statement that, upon your written request within the 30-day period, the debt collector will provide you with the name and address of the original creditor, if different from the current creditor.

If a Collector Violates the Law

You can sue debt collectors that violate your rights. If you win a lawsuit under the FDCPA, you can recover damages (money) for any injuries suffered, up to $1,000 in additional damages, and attorneys’ fees. You might also be able to use a FDCPA violation to negotiate a debt settlement.

If you think a debt collector is violating the law in its communications with you, consider talking to a lawyer to learn about your rights and options. By talking with a lawyer, you can get answers to your questions, figure out the best way to exercise your legal rights, and stop illegal harassment. You can also submit a complaint with the Consumer Financial Protection Bureau (CFPB) online or by calling 855-411-CFPB (2372) and report any problems to your state's attorney general.

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