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.

Under the FDCPA, a collector cannot make such statements as, “if you can’t pay the hospital bill, you should not have had children,” or “if you think what we have been writing is unpleasant, don’t challenge us to see what happens if you keep avoiding us!” Use of insulting, discriminatory or belittling language such as “liar,” “deadbeat,” or “crook” is also not permitted under the Act, including statements that the consumer is financially irresponsible. In addition, the collector may not use obscene or profane language.

Limitations on Where and When to Call

The FDCPA limits where and when a collector can contact you. The debt collector may not communicate with you, including personal visits or telephone calls, at an unusual or inconvenient time. Collection calls to a debtor between 9:00 p.m. and 8:00 a.m. or on Sundays are considered to be unusual and inconvenient. Likewise, the debt collector can’t contact you at an unusual place, such as a neighbor’s home or hospital.

Collection calls to your place of employment are prohibited if the collector has reason to know that your employer does not allow personal telephone calls. You have the right to tell him not to contact you during the time you are at work because that is an inconvenient time for you to be called.

Finally, a collector cannot call you repeatedly or allow the telephone to ring over and over.

Communications Between the Debt Collector and Third Parties

The debt collector should not call your friends, co-workers, employer or relatives to let them know you owe a debt, without your permission. You have the right to keep this information confidential. This means that the collector may not tell the person who answers the telephone the collection agency’s name, unless specifically asked, or state that you owe a debt. However, a collector can contact a third party for help in locating you. In addition, the collector may contact your attorney, your spouse and any co-debtor to discuss your debt.

If the collector sends you mail, the envelope may not show any words, including logo or letterhead, that would let a third party know that the letter is from a collector regarding a debt that you owe. For the same purpose, a collector may not send you a postcard.

The FDCPA gives you the power to stop the debt collector from contacting you. To stop the debt collector from calling, you must notify the collector in writing to cease communications with you. Once you send a letter, the collector has to stop contacting you, except to advise you that (1) he is no longer going to try to collect on the debt, or (2) either the collector or creditor plans to take further action against you permissible by law, such as suing you. The debt collector cannot contact you after you tell him not to in writing, to ask for payment.

It is probably a good idea to send a written request by certified mail, return receipt requested. By doing so, you know that the debt collector received your request and the collector could never argue that he was not aware you wanted the communication to stop. The sample letter below should be all you need to stop the collection calls and letters.

Dear Mr. Mist,

For the past three months, I have received several phone calls and letters from you concerning my overdue Rich’s Department Store account. As I have informed you, I cannot pay this bill. Accordingly, under 15 U.S.C., section 1692c, this is my formal notice to you to cease all further communications with me except for the reasons specifically set forth in the federal law.

Very Truly Yours,

Ms. Debtor

While you may find it is a relief to have the collection calls stop, you should be aware that it might not be in your best interest in the long run. For example, by stopping the lines of communication, some collectors feel they are left with no other choice than to proceed with a lawsuit since they can’t negotiate with you anymore.

Additionally, you may not have immediate notice of actions that the collector may have taken. For instance, if the collector decides to sue you, the first time you may know about it is when you receive a document from the court. The collector may also decide to sell the debt, unbeknownst to you, and you may have difficulty in trying to work out payment arrangements with the buyer of the debt.

Eventually, you should get notice that the debt has been sold, but there may be a period of time where you don’t know who holds your debt, and therefore, with whom you should negotiate payment arrangements. You may find it more helpful to limit the amount of contact the collector has with you, for example, by telling him not to call you at work, rather than stopping all contact with the collector.

What to Do if the Debt Collector Violates the Law

If you feel the debt collector has engaged in practices that you believe are illegal, you can register a complaint with the Federal Trade Commission or complain to your state Consumer Protection Agency.

You may try to get the collector to repeat what he said on the telephone, with witnesses listening. In your letter of complaint, state the date and times of the collector’s unlawful behavior. Attach the names of the witnesses who heard the unlawful behavior and the dates and times they heard it. You will probably want to send a copy of the complaint to the original creditor and the collector. It is possible that the creditor will be concerned enough about the illegal practice to erase the debt.

You also have the right to sue a collector for harassment. You would have the greatest chance at winning such a lawsuit if you have documentation of the illegal practice. Without proper evidence or documentation, it is doubtful that a judge would find that the collector engaged in an illegal practice.

Rather than trying to catch the collector on a technical violation of the law, it is always best to focus on negotiating a satisfactory repayment schedule if the debt is valid.

Finally, it is important to remember that you are no less of a person because you owe a debt. No one has the right to make you feel as if you are not a worthwhile person. The FDCPA was enacted to protect your dignity.