The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act regulates the activities of debt collections. It is provides what the debt collector can do and cannot do. Under the Act, debt is an obligation to pay money arising out of a transaction. The person to who the debt is owed is the creditor. A debt collector is a person whose main business is the collection of debt including attempts to collect the debt.

If the debt collector contacts a third party other than the debtor for collecting the debtor’s location information, the debt collector should identify himself and inform the third party that he is seeking location information about the debtor and if the third party asks for the identity of his employer, he must disclose the identity. Location information is the place of residence, the telephone number and the place of employment. The debt collector cannot inform the third party that the debtor owes a debt. Post cards should not be used as a means of communication. The debt collector cannot use any symbol or language in the communication that would indicate to the third party that the communication deals with debt collection. Once the debt collector is aware that the debtor has a lawyer representing him, then the debt collector cannot contact the debtor directly and must instead send all communications to the lawyer. However when the lawyer does not respond to the communication with a reasonable time, the debtor may be contacted.

Unless authorized by the debtor or by a court order, the debt collector cannot contact

  • the debtor at any unusual or inconvenient place or time. All contact should be made between 8 am and 9 pm (debtor’s time zone). The debt collector cannot contact the debtor at his or her place of work if the employer disapproves of such contact.
  • any third party. A third party is someone other than the debtor, his lawyer and a credit bureau.

If the debtor writes to the debt collector that he does not intend to pay the debt or that he does not want to be contact again regarding the debt, the debt collector should cease all communications except to inform that there will be no more communications or that the debt collector will initiate action as permitted under the law.

Under the Act, certain conduct of the debt collector will be considered as harassment or abuse. It includes:

  • The use or threat of criminal or violent means to cause physical harm to the person, his property or reputation.
  • Using profane or obscene language
  • Providing information about the debtor to any third party except a credit bureau or those who are authorized by this Act.
  • Advertising the sale of any debt in an attempt to make the debtor pay the debt
  • Continuous telephone calls with intent to abuse, annoy or harass the person
  • Telephone calls without disclosing the identity of the caller.

A debt collector cannot use false or misleading representations.  The debt collector cannot falsely represent:

  • the nature and status of the debt
  • the services provided by the debt collector to the creditor and the payment which he will receive from the creditor
  • that the he has the backing of the United States
  • that he is an attorney
  • that the communication is from an attorney
  • that if the debtor fails to make the payment, he can be subject to arrest, levies, garnishment, etc unless the debt collector is authorized by the creditor to take such actions and such actions are permitted by law.
  • that he will take action which is legally prohibited or that which he does not intend to take.
  • that if the debtor transfers any interest in the debt, the debtor will loose certain rights or that such transfer is prohibited
  • that the debtor has committed other crime(s)
  • that he is appointed by a credit agency

The debt collector cannot add additional charges including interest to the debt unless it is authorized by the agreement that created the debt or is legally permitted. The debt collector can accept post dated checks but the post dated checks cannot be more than 5 days. If the debt collector accepts post dated checks more than 5 days, the debt collector should inform the person between 3 and 20 days before depositing the check. Post dated checks cannot be deposited before the date. The debt collector cannot accept a post dated check or any other instrument solely to threaten the debtor with criminal proceedings. When the creditor does not have any right in a property claimed as collateral, the debt collector cannot take or threaten to take any action non-court action to seize the property.

Once the debt collector contacts a debtor, then within 5 days of the first contact, the debt collector should notify the debtor in writing about the details of the debt including the amount and the creditor. The debt collector should also provide written statements along with the details of the debt informing the debtor that the debt will be considered valid and the debt collector will proceed to verify the debt or obtain a judgment against the debtor unless debtor writes to the debt collector within 30 days disputing the debt. The debt collector should also inform the debtor that if the debtor disputes the validity of the debt within 30 days, the debtor will provide the details of the original creditor.

A debt collector can take legal action to recover the debt. Such lawsuit must be instituted in the judicial district where the debtor resides or where the contract was signed. If the debt is secured by real property, the lawsuit can be instituted only in the judicial district where the real property is located.

If the debtor sues the debt collector for violation of the provisions of the FDCPA, the court can order the debt collector to pay the actual damages suffered by the debtor. The court can also order the payment of additional damages up to $1000.

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