Fair Debt Collection Practices
What is the Fair Debt Collection Practices Act (FDCPA)?
FAIR DEBT COLLECTION PRACTICES ACT (FDCPA)
The Fair Debt Collection Practices Act, or FDCPA, is a federal consumer protection law which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect money. The FDCPA only applies to third-party debt collectors. It does not apply to original creditors – the original credit card company, the person you borrowed money from, your former landlord, etc. A debt collector is someone who regularly collects debts owed to others. The most common examples of debt collectors include: debt collection agencies, companies that purchase delinquent debts and try to collect them, lawyers who collect debts on a regular basis.
Scroll down to find out if a debt collector is engaging in abusive practices and what you might be able to do to stop them.
What Types Of Debts Are Covered?
The FDCPA covers personal, family and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, rent and your mortgage. The FDCPA does not cover debts you incurred to operate a business, tax debt, child support payments, license fee, tort judgments or shoplifting claims.
What can debt collectors do to collect debts under the FDCPA?
Debt collectors can gather information about your location – but there are specific rules they must follow:
- a debt collector may contact someone other than the consumer to learn information regarding the location of the consumer but the debt collector must identify him or herself, state that he or she is confirming or correcting the consumer’s location information, and, only if expressly requested, identify his or her employer
- the debt collector can never state to anyone else that the consumer owes a debt
- the debt collector cannot communicate with anyone more than once unless asked to call back or to follow up on an incomplete response from a previous attempt if they debt collector reasonably believes the person now has the information
- the debt collector cannot communicate by post card or use any language or symbol on any written communication that the information is needed to collect a debt or identify that the communication is from a debt collector
the debt collector can also only communicate with an attorney if the consumer notifies the debt collector they are represented by an attorney
communicate with you in a reasonable manner unless you notify them otherwise in writing
How can I stope a debt collector from contacting me?
If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease or stop further communication with the consumer, the debt collector shall not communicate further with the consumer about the debt, except . . .
- to advise the consumer that the debt collector’s further efforts are being terminated;
- to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
- to notify the consumer that the debt collector or creditor intends to invoke a specified remedy
“Consumer” defined . . .
In this section (FDCPA § 805), the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator.
Sample letter to stop the debt collector from contacting you. Make a copy of your letter. Send the original by certified mail, and pay for a return receipt so you have documentation showing the debt collector received the letter.
Never admit that you owe the debt in any written correspondence with the debt collector. Any admission can be used against you and could impact the statute of limitations for collecting any debt.
How do I dispute a debt?
The most basic right a consumer has is to ask the debt collector to validate the debt. The debt collector will usually notify you of the debt in the initial communication to you about the debt. If not, then within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector must send the consumer a written notice containing . . .
the amount of the debt;
the name of the creditor to whom the debt is owed;
a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and mail it to the consumer; and
a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
If you dispute the debt – meaning you don’t believe it is your debt or you don’t owe the money the debt collector is attempting to collect – you may send a written notice to the debt collector disputing the debt. The written notice disputing the debt should be sent within 30 days of receipt of the notice of the debt from the debt collector. If the consumer notifies the debt collector in writing within the 30 day period that the debt, or any portion of the debt, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector must cease collection of the debt, or any disputed portion, until the debt collector obtains verification of the debt or a copy of the judgment, or the name and address of the original creditor, and a copy of the verification or judgment, or name and address of the original creditor, is mailed to the consumer.
The failure of a consumer to dispute the validity of a debt may not be construed by any court as an admission of liability of the debt by the consumer.
Legal Pleadings: A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication of notice of the debt. This means that you must first receive the initial communication from the debt collector advising of your right to dispute or validate the debt.
Additionally, the debt collector can only sue the consumer in the county where the real property is located if the debt involves real property, the county where the consumer signed the contract, or the county in which the consumer resides.
A note about multiple debts: If any consumer owes multiple debts and makes any single payment to any debt collector, the debt collector must apply the payment in accordance with the consumer’s directions.
The above-stated provision, FDCPA § 810, gives a consumer the right to decide how to allocate payments among multiple debts being collected by the same collector. A consumer in this situation may choose to give preference, for example, to a secured debt over an unsecured debt. However, there is no provision that mandates debt collectors to provide consumers with notice of this right.
What can't debt collectors do under the FDCPA?
- harass or abuse you in any way
- lie to you or mislead you
- use unfair business practices to collect a debt
What actions constitute harassment or abuse?
A debt collector may not engage in any conduct with the purpose to harass, oppress, or abuse any person in connection with the collection of a debt, including:
- Use or threaten to use violence or other criminal means to harm the physical person, reputation, or property of any person
- Threats to contact third parties
- Use obscene or profane language to abuse the hearer or reader
- Use intimidating, belittling, insulting, or criminal language or behavior
- Publish a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency
- Advertise the sale of any debt to coerce the payment of a debt
- Make telephone calls without disclosing the caller’s identity
- Calling the consumer at his or her place of employment to collect on the debt notwithstanding warnings on prior occasions that he or she could not talk at work or calling the consumer a large number of times after the consumer told the collector that the debt was paid and requested the debt collector to stop calling
- Cause a telephone to ring or engage any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person
. . . So how many is too many phone calls?
The point at which telephone calls become so frequent as to violate FDCPA § 806 depends on the circumstances.
- A debt collector is entitled to call the debtor more than once, unless the next call is immediately after the consumer demands no more calls and hangs up.
- The FTC has suggested that a call on the day before and the day after a promised payment was due would not violate the FDCPA, but six phone calls in a hour would.
Keeping a Collection Call Log is crucial to preserve evidence of harassment or abuse by a debt collector. You will want to have the Collection Call Log available at all times so you can immediately record the: date, time, length of call, debt collector’s name, agency, and call-back number, type of call a (voicemail, live conversation, dial and hang up), and the content of the communication. Remember to keep all voicemails and written communication received from a debt collector.
What are false or misleading representations?
A debt collector may not use any false, deceptive, or misleading representations or means in connection with the collection of any debt, such as:
- Falsely claim he or she is a government representative or a member of law enforcement
- Send a consumer written communication that simulates or is falsely represented to be an official document from a court or government agency
- Misrepresent the amount of debt owed, the legal status of the debt, or the compensation the debt collector may lawfully receive for the collection of a debt
- Falsely claim he or she is an attorney or that any communication is from an attorney
- Represent that he or she will seize, garnish, attach or sell your property or wages unless the debt collector is allowed to take such actions by law and intends to do so
- Threaten to take any legal action against you, if doing so would be illegal or if the debt collector doesn’t intend to take the action
- Falsely claim that the sale, referral, or transfer of a debt will cause the consumer to lose any claim or defense to the payment of the debt or cause the consumer to become subject to any practices prohibited by the FDCPA
- Falsely claim that the consumer committed any crime in order to disgrace the consumer
- Give or threaten to give false credit information about a consumer to anyone, including the failure to communicate a debt is disputed
- Use false or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer
- Fail to disclose in the initial communication with the consumer that the debt collector is attempting to collect a debt and any information obtained can be used for that purpose
- Fail to disclose in subsequent communications, except legal pleadings, that the communication is from is from a debt collector
- Falsely represent that papers sent to you are legal forms if they aren’tFalsely represent that papers sent to you aren’t legal forms if they are
- Falsely represent that a debt collector is employed by a consumer reporting agency
- Use a false name or company name
- Misrepresentation of the consumer’s legal rights under the FDCPA
- Falsely stating that a search of all consumer assets had been instigated
- Collect a settled debt
- Adding authorized charges to the collector’s claim falsely implying the charges were owed
- Making confusing statements about the amount to pay off or settle the debt
- Threatening to sue or suing on a time-barred debt or the same debt multiple times
What are unfair or deceptive practices?
The FDCPA states that a debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.
- Collect any interest, fee, charge, or expense on top of the amount you owe (the principle obligation) unless it is expressly authorized in the contract that created the debt or by state law
- Examples of potentially illegal charges include:
- Noncontractural collection charges;
- Interest charges;
- Dishonored check charges;
- Service charges;
- Attorney fees;
- Litigation fees;
- Collection agency fees;
- Late fees;
- Prepayment fees;
- Charges under dispute;
- Accept a check or other payment instrument that has been posted dated by more than five days unless the debt collector 1) notifies the consumer in writing that he or she intends to deposit the payment and 2) sends the written notification 10-3 days before the debt collector makes the deposit
- Deposit or threaten to deposit a post-dated check or other post-dated payment instrument early
- Conceal how he or she is contacting a consumer and then charge the consumer for the communication
Examples: fees from collect telephone calls or telegrams
- Contact a consumer by post card
- Take or threaten to take a consumer’s property unless it can be done legally.
This means that if . . .
- there is no present right to possession of the property claimed through an enforceable security interest;
- there is no present intention to take the property; or
- the property is exempt by law
. . . the debt collector can’t take or threaten to take it.
- Use any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer. A debt collector may use his business name if the name does not indicate that he or she is in the debt collection business.
- Threatening to contact unobligated third parties;
- Threatening to advise a creditor to sue, when such counseling by a collector constituted unauthorized practice of law under state law;
- Serving a consumer with a summons for a judgment debtor examination to be conducted in an improper venue under the FDCPA;
- Dunning letters, sent by a collector on law office stationary but actually from an in-house attorney, or signed by an outside attorney or other collector who had know knowledge of the debt.
What do I do if the debt collector has violated the FDCPA?
Any debt collector who fails to comply with any provision of the FDCPA is liable to the consumer against whom the violation occurred in an amount equal to the sum of . . .
- any actual damage sustained as a result of the violation;
- in the case of any action by an individual, additional damages as the court may allow, but not exceeding $1,000
If the lawsuit is successful, the debt collector will be liable for the costs of the lawsuit and reasonable attorney’s fees. Note: If the court finds that a lawsuit was brought in bad faith and for the purpose of harassment, the court may award the defendant debt collector reasonable attorney’s fees and costs.
In determining the amount of liability of a debt collector, the court shall consider, among other relevant factors —
- the frequency and persistence of noncompliance by the debt collector,
- the nature of such noncompliance,
- and the extent to which such noncompliance was intentional
Intent of the Debt Collector
A debt collector may not be held liable if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error.
Statute of Limitations
An action to enforce any liability created by the FDCPA may be brought in any appropriate court of competent jurisdiction within one year from the date on which the violation occurs.
The Consumer Standard
The courts apply an objective “least sophisticated” or “unsophisticated” consumer standard to analyze the protections of the FDCPA. Proof of actual deception of the consumer bringing the FDCPA claim is neither required nor relevant to the debt collector’s liability.
Where can I report an FDCPA violation?
The FTC advises consumers to report any problems you have with a debt collector to your state Attorney General’s office, the Federal Trade Commission, and the Consumer Financial Protection Bureau.
Nevada Attorney General
Attorney General’s Bureau of Consumer Protection Hotline: 702-486-3132
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Telephone: (202) 326-2222
Consumer Financial Protection Bureau
P.O. Box 4503
Iowa City, Iowa 52244
Telephone: (855) 411-CFPB (2372)