Fair Debt Collection Practices Act - FDCPA

AAA

DEFINITION of 'Fair Debt Collection Practices Act - FDCPA'

A Federal law that limits the behavior and actions of debt collectors who are attempting to collect the debt for another person or entity. The law restricts the means and methods by which they can contact the debtor, as well as the time of day that contact can be made. If violated, suit may be brought within one year to collect damages and attorney fees.

INVESTOPEDIA EXPLAINS 'Fair Debt Collection Practices Act - FDCPA'

This law does not protect debtors from those who are attempting to collect a personal debt. For example, if you owe money to the local hardware store and the owner of the store calls you to collect that debt, he is not a debt collector under this act. The act applies to third-party debt collectors such as people who work for a debt collection agency. It is designed to protect debtors from harassment by these individuals in the form of threats of arrest or bodily harm if you don't pay. Collectors can't imply that they represent law enforcement, nor can they make multiple phone calls daily or call you at work if you refuse to take such calls.

RELATED TERMS
  1. Credit Rating

    An assessment of the credit worthiness of a borrower in general ...
  2. Fair Credit Reporting Act - FCRA

    The act that regulates the collection of credit information and ...
  3. Demand Letter

    A letter sent to a debtor requesting payment. A demand letter ...
  4. Lender

    Someone who makes funds available to another with the expectation ...
  5. Debtor

    A company or individual who owes money. If the debt is in the ...
  6. Collection Agency

    A company hired by lenders to recover funds that are past due ...
Related Articles
  1. Negotiating A Debt Settlement
    Budgeting

    Negotiating A Debt Settlement

  2. Outfox The Debt Collector's Hounds
    Personal Finance

    Outfox The Debt Collector's Hounds

  3. Take Control Of Your Credit Cards
    Credit & Loans

    Take Control Of Your Credit Cards

  4. How Credit Cards Affect Your Credit ...
    Credit & Loans

    How Credit Cards Affect Your Credit ...

comments powered by Disqus
Hot Definitions
  1. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an ...
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center