The FDCPA or Fair Debt Collections Practices Act is a federal law that offers protection to consumers against illegal debt collection practices. It places restrictions on what debt collection agencies can say and do when trying to collect an owed debt. It provides coverage for different debt instances such as credit cards, mortgages, and medical bills used for family, personal or household causes.
The FDCPA is applicable only to third-party or outside collection agencies and not to the original creditors who are collecting their owed debts. Also, it’s solely applicable for personal debts and not for business debts. Additional protection to consumers may be offered to consumers through varied State laws.
It is important to note that a collection account can adversely affect your credit score. If you are grappling with debt or have been called by a collector and are concerned about consequent adverse impact on the credit score, then it is recommended that you regularly check your credit reports. Verify correctness as mistakes can cause unwarranted harm to your credit score.
Listed below are some aspects of the law which may not be followed by debt collectors.
The collector has to mail a written notice about the debt to you within a period of 5 days from making the first contact with you.
This notice should have details about the name of the initial creditor and to whom you owe that debt, the amount of the owed debt, and a statement which elucidates your right to dispute such debt. When debt collectors fail to follow this, they are breaking the law.
If you are aware that the debt is not owed by you, then you may write to the collection agency.
You have to do this within 30 days of first getting the notice and ask for proof of that debt. You can also mail in writing to the collector about not desiring any further contact from them.
Collection agencies cannot repeatedly call you just for the purpose of harassing you.
The count of the calls allowed within a time frame is not defined in the law. It’s usually decided in a court. You may begin keeping a written record of all the calls and messages from the collector. This is important if you feel that the agency is calling excessively. Collectors are not allowed to call after 9 PM and before 8 AM. They shouldn’t call during times which you have informed them as being inconvenient for you, too.
Collection agencies can contact family, friends, neighbors, co-workers, or other third parties only for the purpose of locating the debtor.
During such calls, which cannot be made repeatedly, collectors cannot talk about the debt with such third parties.
Collectors cannot make false representations or statements and cannot take or threaten to take legal or negative action.
Collection agencies cannot threaten a criminal prosecution, lawsuit, jail time, salary garnishment or damaging the credit score. They can only do that if they’re authorized by law and they have intention of doing it. Such threats are generally illegal.
Collectors first have to take the debtors to court and win before they can take some of the above mentioned actions as permitted by law.
See Also: How to Get Out of Credit Card Debt Fast