Overview
Consumers are legally obligated to pay their debts until the statute of limitations runs out or under special circumstances like bankruptcy. Debt collectors are often hired by companies to pursue delinquent accounts. Some collectors purchase the debts at discounted rates and make a profit by collection as much as possible. They are bound by a federal law called the Fair Debt Collection Practices Act (FDCPA), which prohibits them from certain deceptive or abusive acts, according to the Federal Trade Commission (FTC).
Definition
Consumers rights regarding debt collection are spelled out at the federal level in the FDCPA. The FTC explains that it applies to any company or law firm that regularly engages in collection activities. It covers personal debts like mortgages, credit card accounts and medical bills, but business debts do not fall under this law.
Time Frame
Debt collectors are limited in the times they can contact consumers. The FTC states they may not call before 8 a.m. or after 9 p.m. unless the person who owes the bill specifically agrees to it. They are also forbidden from calling a person at work at any time once they are notified verbally or in writing that he is not allowed to receive calls while on the job.
Privacy
A debt collector is forbidden by the FDCPA from discussing your bill with anyone other than you, your spouse or an attorney representing you in the matter. The collection agency may contact other people, such as your family, friends and neighbors, in an attempt to get your address, phone number and employment information, but it cannot disclose information about the debt. The FTC advises that they are usually limited to contacting third parties only one time.
Validation
Consumers are entitled to debt validation within five days of the collector’s initial contact. It should be a written notice that states exactly how much money is owed. It should also list the creditor’s name and contain instructions for challenging the debt if the recipient doesn’t believe she owes it, the FTC explains.
Statements
The FDCPA prohibits many kinds of statements by debt collectors. They cannot harass consumers with profane language, make physical threats or call them repeatedly. They cannot claim to be attorneys, law enforcement officials, government workers or anything else that they are not. They cannot make false threats like arrest or seizure of a person’s property, and they cannot say they will garnish wages, file a lawsuit or take other legal actions unless they actually intend to follow through.
Contact
A consumer has the right to demand that a debt collector cease all communication. The FTC recommends writing a letter stating that you do not want any further contact and sending it to the collection agency through certified mail, which provides proof of the mailing. The FDCPA forbids the agency from contacting you again once it receives the letter, other than to confirm there will be no more contact or to inform you of a specific action like a lawsuit. You can take legal action against the agency if it ignores your cease and desist demand.
Warning
The Washington State Department of Financial Institutions warns that phony debt collectors are targeting consumers to pay back non-existent payday loans. The scammers are often based overseas. They call and demand immediate repayment for a loan that was never taken out. They often have a great deal of personal information, and they make use threats of arrest or wage garnishment to obtain bank account information or credit card numbers. They will not follow the FDCPA because they are not legitimate. Their threats should be ignored, and they should be reported to the FTC.
About this Author
Based in Kissimmee, Fla., Barb Nefer is a freelance writer with more than 20 years’ experience. She is also a mental health counselor and travel agency owner. She specializes in self-help, travel, parenting, relationships and animals. Her work has appeared in such magazines as “The Writer,” “Animal Wellness,” “SuperVision,” “Bird Talk,” “SpeciaLiving” and “Twins.”
