Loading the player...

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 Fair Debt Collection Practices Act (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.

RELATED TERMS
  1. Debt Collector

    A debt collector is a company or agency that is in the business ...
  2. Zombie Debt

    Zombie debt is debt that has "risen from the grave" when debt ...
  3. Debt Assignment

    Debt assignment is a transfer of debt, and all the associated ...
  4. Debtor Nation

    A nation with a cumulative balance of payments deficit. A debtor ...
  5. Automatic Stay

    An automatic stay is a legal provision that temporarily prevents ...
  6. Debt Buyer

    If a debt becomes delinquent and the lender sees few options ...
Related Articles
  1. Personal Finance

    How the debt collection agency business works

    Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
  2. Personal Finance

    5 Things Debt Collectors Are Forbidden to Do

    Some debt collectors will say or do anything to get people to pay them. Although you may owe money, but you still have rights. Discover the 5 things debt collectors are forbidden to do.
  3. Personal Finance

    Outfox the Debt Collector's Hounds

    Dealing with a collection agency is scary if you don't know your rights. We help you take back the power.
  4. Personal Finance

    Here's What Debt Collectors Couldn't Do Anymore

    The Consumer Financial Protection Bureau has proposed new regulations designed to offer consumers more protections when dealing with debt collectors.
  5. Taxes

    6 Ways To Keep Aggressive Debt Collectors At Bay

    Get an upper hand on debt collectors by knowing your rights and using these tips.
  6. Small Business

    The Dark Side Of Debt Collection

    Debt collectors are becoming more aggressive, and have found "legal" ways to function outside the law. Know your rights and how to counter these new methods.
  7. Personal Finance

    Negotiating A Debt Settlement

    If you're being harassed by a debt-collection agency, you can take charge. Find out how.
  8. Personal Finance

    Debt After Death: Do Kids Owe for Parents?

    More and more Americans are dying while in debt. Are children responsible for the debts of their parents? What’s the scoop on parental debt after death?
  9. Personal Finance

    Fighting Back Against Collection Lawsuits

    There are still options available to those being pursued by a creditor.
  10. Personal Finance

    The Millennial Guide to Medical Debt

    In America, it doesn’t take much to generate significant medical debt, even when you're young.
RELATED FAQS
  1. Debt and collection agency

    Find out what happens when your debt account is sold from one collection agency to another and the impact on your balance ... Read Answer >>
  2. How can a creditor improve its Average Collection Period?

    Read about some of the ways that a business can improve its accounts receivable management practices to shorten its average ... Read Answer >>
  3. Do I still owe debt collectors for a debt that's past the statute of limitations ...

    Learn more about the statutes of limitations that govern certain personal debts and why you maintain obligations as a debtor ... Read Answer >>
  4. Can personal loans be included in bankruptcy?

    Read about debts that are dischargeable when filing for bankruptcy. Learn about how personal loans are treated when filing ... Read Answer >>
Hot Definitions
  1. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  2. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  3. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  4. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  5. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  6. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
Trading Center