The Fair Debt Collection Practices Act (FDCPA) was established to protect the consumer from harassing and illegal tactics used by unethical and unscrupulous debt collectors. The act does not apply to the original creditor but does apply to someone other than the original creditor who tries to collect on the debt.

Here are the basics of that act and how they affect you from the Federal Trade Commission (FTC).

Debtors, Collectors, and Charge Off

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector." You should be aware that FDCPA requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.

When a debt is ”written off” or “charged off” by an original creditor, the action is nothing more that an accounting action. It means that the debt will be forgotten by the creditor or more likely, sold to a third party. But the debt is still very collectable if within the state statue of limitations.

Who is considered a debt collector?

A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis. It may include departments of a company specifically set up for this purpose.

A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

Can you stop a debt collector from contacting you?

You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. The debt collector or your original creditor (if the debt is not sold) could still sue you.

If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney and you have not sent the creditor a cease contact notice, a collector may contact other people. But the agency can only make contact to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.

A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

What must the debt collector tell you about the debt?

Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

What debt collection practices are prohibited?

A debt collector is prohibited from any of the following:

Harassment - Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, debt collectors may not: use threats of violence or harm; publish a list of consumers who refuse to pay their debts (except to a credit bureau) use obscene or profane language; or repeatedly use the telephone to annoy someone.

False statements - Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not: falsely imply that they are attorneys or government representatives; falsely imply that you have committed a crime; falsely represent that they operate or work for a credit bureau; misrepresent the amount of your debt; indicate that papers being sent to you are legal forms when they are not; or indicate that papers being sent to you are not legal forms when they are. Debt collectors also may not state:

1. You will be arrested if you do not pay your debt
2. They will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so
3. Actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.

False Information - Debt collectors may not: give false credit information about you to anyone, including a credit bureau; send you anything that looks like an official document from a court or government agency when it is not; or use a false name.

Unfair practices - Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not: collect any amount greater than your debt, unless your state law permits such a charge; deposit a post-dated check prematurely; use deception to make you accept collect calls or pay for telegrams; take or threaten to take your property unless this can be done legally; or contact you by postcard.

Payment of Debt - If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.

What can you do?

You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

Report any problems you have with a debt collector to your state Attorney General's office. Many states have their own debt collection laws and your Attorney General's office can help you determine your rights. You should also complain to the Federal Trade Commission (FTC) online or call the Federal Trade Commission 1-877-382-4357.

Readers will probably be interested to know Mike, the author of this article, also offers a free debt elimination mini-course via e-mail. You can enroll at Debt Free In 7.5 Years.

Author's Bio: 

Mike has been an Internet Guide/Writer in the field of Credit/Debt Management for over 10 years. His site was awarded Best Of Net by Forbes Publication from 2000 to 2005 with site visitation doubling to over 500,000 average views per month in the last year.


He has also offered debt elimination seminars to businesses and community colleges for the last 9 years, and has written for several publications, and has been interviewed on the radio a number of times.
http://learncreditmanagement.com/