Fair Debt Collection
- Dealing with debt collection harassment
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 know that in either situation, the Fair Debt Collection
Practices Act 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.
This article answers
commonly asked questions about your rights under the Fair
Debt Collection Practices Act.
What debts are
covered?
Personal, family, and household debts are covered under the
Act. This includes money owed for the purchase of an automobile,
for medical care, or for charge accounts.
Who is 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.
How may a debt
collector contact you?
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. You could still be sued by the debt collector or your
original creditor.
May a debt collector
contact anyone else about your debt?
If you have an attorney, the debt collector must contact the
attorney, rather than you. If you do not have an attorney,
a collector may contact other people, but only 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.
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.
May a debt collector
continue to contact you if you believe you do not 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 types of
debt collection practices are prohibited?
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 that:
you will be arrested if you do not pay your debt;
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; or
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.
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 postdated 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.
What control
do you have over payment of debts? 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 if you believe a debt collector violated the law?
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.
Where can you
report a debt collector for an alleged violation? Report any problems you have with a debt collector to
your state Attorney General' s office and the Federal Trade
Commission. Many states have their own debt collection laws,
and your Attorney General' s office can help you determine
your rights.
The FTC
works for the consumer to prevent fraudulent, deceptive and
unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them.
To file a complaint or to get free information on consumer
issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP
(1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet,
telemarketing, identity theft, and other fraud-related complaints
into Consumer Sentinel, a secure online database available
to hundreds of civil and criminal law enforcement agencies
in the U.S. and abroad.
