What Is the Fair Debt Collection Practices Act?

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, as amended in 2010, 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 within one year against the debt collection company as well as the individual debt collector for damages and attorney fees.

Key Takeaways

  • The Fair Debt Collection Practices Act covers when, how, and how often a third-party debt collector can contact a debtor.
  • In some cases, a debt collector can work out a payment plan or settlement to help a debtor pay their bill.
  • If the FDCPA is violated, a debt collector can be sued 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 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. 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 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

Fair Debt Collection Practices Act violations specify 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 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.

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

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 his place of employment, the collector must not call that number again.

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

  • How much money is owed
  • The name of the creditor the debt is owed to
  • What to do if you think the debt is not yours

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 collector received the request.

If a bill 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.

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. The law has made it illegal for debt collectors to harass debtors and, in particular, they cannot threaten 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.