The federal Fair Debt Collection Practices Act (FDCPA) prohibits third-party debt collectors from harassing consumers. It gives consumers the right to sue abusive debt collectors in court and recover actual damages, up to $1,000 in statutory damages, court costs, and attorney fees.
The federal Fair Debt Collection Practices Act (FDCPA) was enacted in 1978 to protect consumers against abusive debt collectors. Originally, the Federal Trade Commission (FTC) was given regulatory oversight for the FDCPA, but a 2010 amendment delegated those responsibilities to the newly formed Consumer Financial Protection Bureau (CFPB). The law includes an individual right of action, so that consumers can sue debt collection agencies and recover actual damages, up to $1,000 in statutory damages, court costs, and attorney fees.
Definition of a debt collector
The FDCPA defines debt collectors as those in the business of collecting debts, including attorneys, who use such interstate devices as phones, internet, and mail.
The FDCPA regulates activities by third-party debt collectors, but not collection activities taken by employees of original creditors. For example, a collector employed by a bank is not covered under the FDCPA, but a debt collection agency hired by the bank to collect the debt must abide by the FDCPA.
In 2017, the U.S. Supreme Court ruled that debt buyers, who typically purchase old, charged-off debt for pennies on the dollar, are not debt collectors under the FDCPA. (See Henson v Santander.)
Definition of a consumer
The FDCPA defines a consumer as a natural person. This means that the FDCPA applies to personal debt, but not to business debt.
How debt collectors can find you
A debt collector may ask a third party – like a friend, family member, or your employer – for your address, phone number, and place of employment. A debt collector is required to identify themself and, only if requested, identify their employer. A debt collector may not:
- Tell the third party that you owe a debt.
- Contact the third party more than once (unless requested to do so.
- Communicate by postcard.
- Send written communication that indicates they’re collecting a debt.
- Talk to a third party if you’re represented by an attorney.
How debt collectors can communicate with you
The FDCPA regulates how and when a debt collector can communicate with you. It prohibits a debt collection agency from:
- Mailing a postcard to you
- Mailing you an envelope that indicates it is from a debt collector
- Contacting you if it knows you have an attorney
- Suggesting a meeting at a place known to be inconvenient for you
- Contacting you before 8:00 a.m. or after 9:00 p.m. in your time zone
- Calling your workplace after you have told them not to or that your employer doesn’t allow personal calls
- Contacting you after you have sent them a written notice telling them not to; there are two exceptions to this prohibition
Protection from harassment or abuse
The FDCPA’s primary focus is preventing debt collector harassment. Under the law, a debt collector cannot:
- Use threats of violence or other criminal means to harm you in any way
- Use profane or abusive language
- Publish your name alleging that you refuse to pay a debt
- Repeatedly call you or talk to you in order to annoy and harass you
- Call without disclosing their identity
Protection from false or misleading information
The FDCPA also seeks to prevent debt collectors from lying to you or trying to trick you. For example, a debt collector cannot:
- Tell you that they are an attorney of they are not an attorney
- Lead you to believe that they are a government representative, including by wearing a uniform or showing you a badge
- Give you misinformation about the type, amount, or legal status of the debt
- Tell you that, if you don’t pay the debt, you’ll be arrested or sent to jail
- Threaten that they’ll take your property or garnish your wages if you don’t pay the debt
- Threaten to sue you if they don’t intend to do so
- Lie about being a debt collector or lie about the company they work for
- Fail to identify themself as a debt collector and to state that all information will be used to collect the debt
- Claim that they’re from a credit bureau
Protection from unfair practices
“Unfair practices” seems like a vague concept, but the FDCPA provides a laundry list of debt collection practices that it deems unfair. For example, a debt collector cannot:
- Collect money that isn’t part of the original credit agreement, such as interest, fees, or expenses
- Accept a check postdated by more than five days without providing you with a written notice three days prior to the collection agency deposit it
- Threaten you with criminal prosecution unless you give them a postdated check
- Deposit or threaten to deposit a postdated check prior to the date on the check
- Threaten to take your property unless it’s used as collateral
Notices required from a debt collector
The FDCPA lays out specific information about what a debt collection agency must do in order to validate your debt. For example, within five days after initially contacting you, the debt collector must send you a written notice stating:
- The amount of debt
- The name of the creditor
- That you have 30 days to dispute the debt; if not, they will assume the debt is valid
- That if you dispute the debt, the debt collection agency will send you verification of the debt
- That if you request it in writing, the debt collector will provide you with the name and address of the original creditor
If you dispute the debt, the FDCPA prohibits the debt collection agency from contacting you again until you receive the name and address of the original creditor.
Rules about multiple debts
Under the FDCPA, if a debt collection agency is trying to collect on multiple debts that you owe, you can make a payment on one of those debts. The debt collection agency must apply the payment to the debt you specified. It cannot apply your payment to a different or to a disputed debt.
Legal actions by debt collectors
The FDCPA doesn’t authorize any legal actions by debt collection agencies. It does say that, if a debt collection agency files a lawsuit regarding real estate, it has to be filed where the property is located. It also outlines that, if a debt collection agency sues you, it has to file the lawsuit in the jurisdiction where you live or in the jurisdiction where you signed the contract that generated the debt.
Using deceptive forms
The FDCPA prohibits debt collectors from creating or giving you a form that leads you to believe that someone else is involved in the debt collection activity, such as a family member or the government.
Penalties if debt collectors violate the FDCPA
If a debt collector violates the FDCPA, you can sue the debt collection agency in state or federal court. The FDCPA allows you to recover actual damages, statutory damages up to $1,000, court costs, and attorney fees. This fee-shifting provision makes it feasible for individual consumers to assert their rights and fight against debt collection abuse.
If you are a named plaintiff in a class action lawsuit, in addition to these damages you are entitled to an amount the court allows for all members of the class, not to exceed either $500,000 or one percent of the debt collection agency’s net worth.
The FDCPA’s relationship to state laws
Congress clearly wanted the FDCPA to harmonize with state consumer protection laws. It specifically provides that debt collectors remain subject to all state laws unless they are inconsistent with the FDCPA. This inconsistency exists only if you are state protections are less than the protections afforded by the FDCPA.
If a debt collector has been hounding you, call a Lemberg Law representative at 844-685-9200 for a free, no-obligation case evaluation. Our attorneys have experience standing up for consumers and fighting debt collectors. If a debt collector has violated the Fair Debt Collection Practices Act, you’re entitled to file suit in federal court and could be awarded up to $1,000, court costs, and attorney fees.
Henson v. Santander Consumer USA Inc., 582 U.S. ___ (2017)
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