Fair Debt Collection Practices Act (FDCPA)

What Is the Fair Debt Collection Practices Act (FDCPA)?

The Fair Debt Collection Practices Act (FDCPA) is a federal law that limits the actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity. The law restricts the ways that collectors can contact debtors as well as the time of day and number of times that contact can be made. If the FDCPA is violated, the debtor can sue the debt collection company as well as the individual debt collector for damages and attorney fees. In November 2021, the Consumer Financial Protection Bureau also put the Debt Collection Rule in place, clarifying how debt collectors can communicate with debtors.

Key Takeaways

  • The Fair Debt Collection Practices Act (FDCPA) covers when, how, and how often a third-party debt collector can contact a debtor.
  • It also sets limits on who else the debt collector is allowed to contact.
  • If a debt collector violates the FDCPA, the debtor can sue them in state or federal court for damages and legal fees within one year of the violation.

How the Fair Debt Collection Practices Act Works

The FDCPA creates a structure within which debt collectors are allowed to work in an attempt to make debt collection a fair and non-aggressive process. The law limits the time of day that collectors may call, the type of language they may use, and how they represent themselves. If a debt collector violates the parameters of the law, debtors may submit a complaint with the Consumer Financial Protection Bureau or take the debt collector to court.

The FDCPA does not protect debtors from those who are attempting to collect a personal debt. If you owe money to the local hardware store, for example, and the owner of the store calls you to collect that debt, that person is not a debt collector under the terms of this act. The FDCPA only applies to third-party debt collectors, such as those who work for a debt collection agency. Credit card debt, medical bills, student loans, mortgages, and other kinds of household debt are covered by the law.

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The Fair Debt Collection Practices Act (FDCPA)

Example of When and How Debt Collectors Can Contact Debtors

The Fair Debt Collection Practices Act specifies that 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 have made an arrangement for a call to occur outside of the permitted hours. If a debtor tells a collector that they want to talk after work at 10 p.m., for instance, the collector is allowed to call then. Without an invitation or agreement, however, the debtor cannot legally call at that time. Debt collectors may also send letters, emails, or text messages to collect a debt.

Debt collectors can attempt to reach debtors at their homes or offices. However, if a debtor tells a bill collector, either verbally or in writing, to stop calling their place of employment, the collector must not call that number again.

Debt collectors may now also contact debtors through social media, although there are stipulations in place. They may only contact debtors in a private manner that is hidden from other friends or connections. They must also identify themselves as a debt collector, even while requesting to connect with you. In every exchange, they must offer you a way to opt-out of their communications as well.

The new Debt Collection Rule also limits how many times a debt collector may call. They may not call more than seven times in a seven-day period. While they may not call more than seven times, they may message, text, or email you more frequently.

Within five days of contacting a debtor, the debt collector must send a written "validation notice" that includes:

  • How much money the debtor owes
  • The name of the creditor to whom the debt is owed
  • Notice that they have 30 days to dispute the debt and what to do
  • A tear-off portion to use as a dispute form

Important

The FDCPA makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they attempt to collect debts.

Special Considerations

Debtors can also stop collectors from calling their home phones, but they must put the request in a letter and send it to the debt collector. It's a good idea to send the letter by certified mail and pay for a return receipt so that you have proof that the debt collector received the request.

If a collector does not have contact information for a debtor, they can call relatives, neighbors, or associates of the debtor to try to find the debtor's phone number, but they cannot reveal any information about the debt, including the fact that they are calling from a debt collection agency. (The collector may only discuss the debt with the debtor or their spouse.) Additionally, collectors can only call third parties one time each.

The law makes it illegal for debt collectors to harass debtors in other ways, including threats of bodily harm or arrest. They also cannot lie or use profane or obscene language. Additionally, debt collectors cannot threaten to sue a debtor unless they truly intend to take that debtor to court.

Can a Debt Collector Physically Come to my Place of Business?

No. The FDCPA considers a physical visit to your workplace "publicizing" your debt. They may call you at work, but if you tell them to stop, they must comply.

What Can I Do If I'm Being Harassed by a Debt Collector?

If you feel that a debt collector has violated the FDCPA, you may contact the Consumer Financial Protection Bureau (CFPB) or your state's attorney general.

What Is Considered Harassment Under the FDCPA?

Harassment can include repetitive phone calls, calling very early or very late, obscene or threatening language, publicizing the debt, and calling without identifying themselves as a debt collector.

Article Sources
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  1. Consumer Finance Protection Bureau. "Understand How The CFPB's Debt Collection Rule Impacts You."

  2. Federal Trade Commission (FTC). "Fair Debt Collection Practices Act."

  3. Federal Reserve Board. "Fair Debt Collection Protections Act: Compliance Handbook," Page 2.

  4. Federal Reserve Board. "Fair Debt Collection Protections Act: Compliance Handbook," Page 4.

  5. Federal Reserve Board. "Fair Debt Collection Protections Act: Compliance Handbook," Page 1.

  6. Federal Trade Commission. "Debt Collection FAQs: How Can a Debt Collector Contact Me?"

  7. Federal Reserve Board. "Fair Debt Collection Protections Act: Compliance Handbook," Pages 2-3.

  8. Consumer Financial Protection Bureau. "What Is Harassment By a Debt Collector?"