The Fair Debt Collection Practices Act was first passed by U.S. Congress in 1966 and was thoroughly revised in 2006.
Most of the questions we get here relate to what collectors can and can’t do. Since all collection agencies in the United States are governed by the FDCPA or Fair Debt Collections Practices Act, I decided it would be good to post on the Top 5 things most consumers DON’T KNOW about the FDCPA.
Most consumers understand that collectors can and cannot do certain things, but sometimes they make assumptions based on logic or intuition. However, it is important to understand exactly what FDCPA covers and what it does not… in many cases it may surprise even the most educated consumers.
So, here is our list of the Top 5 Things You Did Not Know About FDCPA.
5. You can have a collector to stop calling you. Just as simple as that. All you have to do is send the collector a letter and let them know you have no intention of paying the debt or that you are requesting that they cease communications. Section 805.c is very clear on this matter:
(c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except—
(1) to advise the consumer that the debt collector’s further efforts are being terminated;
(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.
If such notice from the consumer is made by mail, notification shall be complete upon receipt.
Our Cease and Desist Letter will do the trick!
4. Collectors can show up at your home… in person! There is nothing in FDCPA that prevents a collector from visiting you in person. Now, this is expensive and cumbersome, but it has been known to occur. Several companies were offering these services to mortgage companies during the economic downturn and housing crisis the last few years. We also see payday loan collectors doing this from time to time, since they have employees without much to do manning their stores on slow days.
It should be noted that they can also show up at your place of employment or any other place you might be.
3. Collectors should only call your references or family members once. Making calls to references, family members, neighbors, etc. is a tried and true collection practice. The reason is that this causes embarrassment and increases the chances of the consumer paying. However, according to FDCPA this type of contact should be very limited. Collection agencies should only contact someone other than the debtor in order to get location information on the debtor and should not recontact them unless they have reason to believe the reference or third party may have new information. There are several implications here:
- If you are in contact with the agency, they should not be contacting third parties. They are only to use that tactic to find your location information and if they have that, there is no need to contact others.
- The agency should never identify their company unless the third party asks explicitly.
- There is no reason, in most cases, for an agency to call a third party more than once.
This is one of the most common FDCPA abuses that I hear about. Agencies will hound references and relatives in an attempt to “shame” debtors into paying. However, the protections against this in FDCPA are very strong.
2. Nothing in FDCPA prevents collectors from being rude. While collectors are prevented from doing anything to “harass, oppress, or abuse any person in connection with the collection of a debt,” this does not prevent them from being rude. Short of oppressing or abusing you, using profanity or threatening violence, they can be extremely rude. Examples of this that I have seen are hanging up on customers, being extremely condescending and generally being rude and difficult. Certainly, some lawyers would take up a case on some of these, but it is pretty easy to be rude without meeting the definitions in FDCPA.
1. FDCPA only applies to 3rd Party Collection Agencies. This is probably the MOST prevalent misconception I get about FDCPA. It simply does not cover the original creditor. In fact, there is no Federal Law that covers creditor collection efforts. So, technically speaking, an original creditor, say Citibank, can curse at you, call you at midnight, tell your neighbors you owe a debt to them and generally operate without rules. Now, I should note that most ethical creditors operate under self-imposed guidelines that are close to FDCPA and there are state laws in some states that apply to original creditors (Texas for example). However, there is no Federal Law covering original creditors.
I hope this helps everyone’s FDCPA education and creates more knowledgeable consumers who can work to stop debt collectors in their lives.
Here is a link to the FULL FDCPA.
