When you are in debt, sometimes you may feel that you are a sitting duck, waiting for the debt collector to call. What you may not realize, however, is that there are laws which protect debtors from collector practices that you may find troublesome or harassing.

 

The federal Fair Debt Collections Practices Act (hereafter referred to as the “FDCPA”) and other consumer protection laws are written to help consumers. The laws assume that you did not get into debt because you are a deadbeat , but that you fully planned to pay until unforeseen circumstances, such as a job layoff or illness, made it difficult for you to pay your bills. The FDCPA limits how far the debt collector may go to try to collect a debt from you. In fact, under the Act, a debt collector may not act in ways that harass or abuse any person while trying to collect a debt.

 

Who Has to Follow the FDCPA?

 

The FDCPA applies only to a collection agency (an agency the original creditor turns your account over to), a creditor collecting for another person, a repossession company, one who buys debts after the debtor fails to pay, or an attorney hired for the purpose of debt collection. Your original creditor - the company that you owe - does not have to follow the FDCPA. But this does not mean original creditors may treat you however they wish. If you feel your original creditor is harassing you, you may be able to sue the creditor for harassment. In addition, the laws of your state may give you protection from both abusive collector and creditor practices.

 

So what rules does the debt collector have to follow when trying to collect the debt?

 

Communications Between the Debtor and the Collector

 

When a collector contacts you to collect a debt, he has to follow certain rules.

 

Disclosures

 

The collector has to let you know:

  • The amount of the debt.
  • The name of the original creditor.
  • You have 30 days to dispute that you owe the debt.
  • The collector will send you verification that you owe the debt if you dispute it.

 

A demand for payment will usually be included and sometimes a threat that if payment is not received immediately, the debt will be reported as delinquent, or that the collector may take legal action against you.

 

Identification

 

Once the debt collector reaches you by telephone, he must tell you that the call is for the purpose of collecting a debt, and that information provided by you will be used for debt collection purposes. The law also requires that the collector identify that he is calling from a collection agency.

 

No False Information or Threats

 

An agency trying to collect a debt from you may not tell you false information to get you to pay. For instance, the collector may not send a letter threatening to sue when he does not intend to sue you, or threatening to sue you before he actually intends to sue. A collector also cannot threaten a debtor in writing, such as sending a letter written in bold print, stating “48-Hour Notice—Warning—Pay This Amount” which a consumer could think of as a threat. Courts have held that a collector demanding payment in five days and describing steps to a lawsuit that the collector threatened to recommend to a creditor misleads the consumer into thinking that a lawsuit will be filed in five days. Similarly, a letter from a creditor identified as a “72-hour notice” threatening legal action within 72 hours is deceptive if he has no intention to sue you in 72 hours. Accordingly, if you receive a letter marked “final notice” from the collector, the collector may not write to you again asking for payment.

 

In addition, the collector may not impersonate an attorney on the telephone, or send a letter that looks like it is from an attorney or the court when it’s not. The collector also may not use a false business name or claim to be calling from the credit bureau, unless the agency he works for is also a credit bureau. You should be wary of a collector who tries to claim that he is a representative of the government or police. Statements such as these are probably not true.

 

Statements by the collector that he will take your property or garnish your wages sooner than is permitted by law is also considered a deceptive practice. (In most states, property cannot be attached or wages may not be garnished until a collector has sued you and the court rendered judgment in his favor.) Similarly, threats of arrest or imprisonment are prohibited if the collector does not intend to follow through or if the action is illegal. (While debtors may not be put in jail or arrested for owing the majority of debts, arrests and imprisonment could result from failure to pay child support in most states.) Under the FDCPA, a collector may not demand payment by threatening the consumer, such as a threat to harm the consumer’s credit and business reputation.