Fair Debt Collection Practices Act

Fair Debt Collection Practices Act Designed to Protect Consumers From Unfair Practices

San Diego, CA.

"Would you know what to do if you were being called at work and home, almost daily, by a bill collector? Probably not, unless you’re familiar with the Fair Debt Collection Practices Act (FDCPA). Most consumers are not even aware it exists. Many indebted consumers are afraid to answer the telephone for fear it’s another bill collector. Others won’t answer the phone at all," said Paul Richard, RFC, executive director of the nonprofit Institute of Consumer Financial Education (ICFE) based in San Diego, CA. The ICFE helps consumers of all ages understand their credit rights through a variety of classes, seminars and its Web site.

"Delinquent borrowers don’t have to put up with improper telephone calls. Borrowers have rights too, and they’re spelled out in the Fair Debt Collection Practices Act,” says the ICFE. Congress created the act to protect consumers with personal, family and household debts. According to the act’s authors, “There is abundant evidence of the use of abusive, deceptive and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to the invasions of individual privacy.”

If you feel you have received an improper call... (and you could with a layoff, divorce or other unexpected event), here are the rules debt collectors must abide by to comply with the Fair Debt Collection Practices Act, a federal law that applies in all fifty states.

When can debt collectors contact consumers?

Unless you give them permission to do otherwise, debt collectors can only contact you between 8 a.m. and 9 p.m., local time at the consumer’s location. Debt collectors can contact you in person, by phone, by mail, by telegram or by fax.

Can debt collectors contact consumers at work?

The answer is “no” if they know or have reason to know that the borrower’s employer disapproves of such communication. Otherwise you have to tell them not to call at work and you must provide an alternate phone number.

What constitutes debt collector harassment?

The act also prohibits the use of threats, profane language and abusive telephone calls by debt collectors. In most instances, it prohibits the publication of a list of consumers who allegedly refuse to pay debts.

What can debt collectors tell neighbors and friends?

Debt collectors can contact other people but only to ask for information on how to find the person with the outstanding debt. In most cases, they are not supposed to tell anyone other than the consumer and his or her legal representative that the consumer owes money.

Can consumers get debt collectors to stop contacting them?

Debt collection agencies are required to honor written requests to stop contacting consumers. Upon receipt of the letter, the debt collection agency can either tell the consumer that they agree to stop or that the collection agency or creditor plans to pursue another course of action.

What does the debt collector have to tell you about the debt?

Within five days of the initial contact, the debt collector is required to tell the consumer in writing what the consumer owes; the name of the creditor to whom the consumer owes the money; and what consumers who claim not to owe the money can do.

Debt collectors who fail to comply with the statutes of the Fair Debt Collection Practices Act can be sued in state and federal court. Consumers who know of violations can contact their State Attorney General’s office or the Federal Trade Commission. To file a complaint with the Federal Trade Commission, call 1-877-FTC-HELP.

For more information on reducing debt, visit the ICFE's Web site at www.icfe.info. Click on "Steps to Take to Reduce Indebtedness." For readers without Internet access, you may receive the same information by sending $1 and a self-addressed, 60 cent stamped envelope to:

ICFE Money Helps
PO Box 34070
San Diego, CA 92163-4070

©  Paul Richard, RFC and the Institute for Consumer Financial Education. All rights reserved.