What is the 'Fair Debt Collection Practices Act - FDCPA'
The Fair Debt Collection Practices Act (FDCPA) is a federal law that limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity. The law restricts the means and methods by which collectors can contact debtors, as well as the time of day and number of times contact can be made. If the FDCPA is violated, a suit may be brought against the debt collection company and the individual debt collector within one year, to collect damages and attorney fees.
BREAKING DOWN 'Fair Debt Collection Practices Act - FDCPA'The FDCPA 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 the terms of this act. The act only applies to third-party debt collectors, such as those who work for a debt collection agency.
When Can Debt Collectors Contact Debtors?
Under the terms of the FDCPA, debt collectors cannot contact debtors at inconvenient times. That means they should not call before 8 a.m. or after 9 p.m., unless the debtor and the collector made an arrangement for a call to occur outside of those hours. For example, if a debtor tells a collector that he wants to talk after work at 10 p.m., the collector can call. Without invitation or agreement, however, the debtor cannot legally call at that time.
Where Can Collectors Call Debtors?
Debt collectors can attempt to reach debtors at their homes or offices, but if a debtor tells a bill collector, either verbally or in writing, to stop calling his place of employment, the collector must not call that number again. Debtors can also stop collectors from calling their home phones, but they must put the request in writing.
If a bill collector does not have contact information for a debtor, he can call relatives, neighbors or associates of the debtor to try to find the debtor's phone number, but he cannot reveal any information about the debt, including the fact that he is calling from a debt collection agency. Additionally, collectors can only call third parties one time each.
What Can Debt Collectors Do?
Debt collectors can only tell a debtor about the debt and request payment. In some cases, collectors can work out a payment plan or settlement to help the debtor pay the bill. However, the FDCPA is designed to protect debtors from harassment by bill collectors. As a result, it is illegal for debt collectors to harass debtors, and in particular, they cannot threaten bodily harm or arrest. Additionally, debt collectors cannot threaten to sue debtors unless they truly intend to take the debtors to court.