What Is the Fair Debt Collection Practices Act (FDCPA)?
The Fair Debt Collection Practices Act (FDCPA) is a federal law that limits the actions of third-party debt collectors that are trying to collect debts on behalf of another individual or entity. The regulation restricts the ways that collectors can get in touch with debtors, along with the time of day and amount of times that contact can be made. If the FDCPA is violated, the debtor can take legal action against the debt collection agency along with the individual debt collector for damages and attorney fees.
How the Fair Debt Collection Practices Act Works
The FDCPA does not protect debtors from those that are attempting to collect a personal debt. If you owe money to the local hardware shop, for example, and the owner of the shop calls you to collect that debt, that person is not a debt collector under the terms of this act. The FDCPA just applies to third-party debt collectors, such as those who work for a debt collection agency. Credit card debt, medical bills, student loans, mortgages, and various other types of household debt are covered by the law.
Example of When and How Debt Collectors Can Contact Debtors
The Fair Debt Collection Practices Act specifies that debt collectors can not contact debtors at inconvenient times. That means they must not call before 8 a.m. or after 9 p.m. unless the debtor and the collector have made an agreement for a call to happen outside of the allowed hours. If a debtor informs a collector that they would like to speak after work at 10 p.m., for example, the collector is permitted to call then. Without an invitation or agreement, however, the debtor can not legally call at that time. Debt collectors can also send letters, emails, or text messages to collect a debt.
Debt collectors can attempt to contact debtors at their homes or place of work. However, if a debtor asks a bill collector, either verbally or in writing, to quit calling their place of work, the collector must not call that number again.
Within five days of contacting a debtor, the debt collector must send a written "validation notice" that includes:
- The amount of money the debtor owes
- The name of the creditor to whom the debt is owed
- Notice that they have 30 days to dispute the debt and what to do
Debtors can also prevent collectors from calling their home phones, but they have to put the request in a letter and send it to the debt collector. It's a good idea to send the letter by certified mail and pay for a return receipt to make sure that you have proof that the debt collector received the request.
If a collector does not have contact information for a debtor, they can call family members, neighbors, or associates of the debtor to get the debtor's contact number, but they can not reveal any information about the debt, including the fact that they are calling from a debt collection agency. (The collector may only talk about the debt with the debtor or their spouse.) Additionally, collectors can only call third parties one time each.
The law makes it illegal for debt collectors to bother debtors in other ways, including threats of bodily harm or arrest. They also can not lie or use profane or obscene language. In addition, debt collectors can not threaten to take legal action against a debtor unless they truly plan to take that debtor to court.