Fair Debt Collection Practices In The U.S.


If you have credit cards, have personal loans you owe money for, or currently have a mortgage loan on your home, you are a considered the debtor. If you fall behind on your payments owed to your creditors, or an error is made on your accounts, a debt collector may attempt to contact you.

You should be aware that in both situations, the Fair Debt Collection Practices Act requires by law that debt collectors must treat you fairly and forbids certain methods from being used by debt collectors. However, the law will not remove any debt that is legitimate in which you owe.

Below are some answers commonly asked questions about your rights under the Fair Debt Collection Practices Act.

What debts are covered?

Personal debt, family debt, and household debts are covered under the Federal Debt Collection Practices Act. This includes car loans, medical care loans, and credit card accounts.

Who is a debt collector?

A debt collector is a company, individual, or lawyer who collects debts for the creditor on a regular basis.

How may a collection agency contact you?

A debt collector may contact you in person, by mail, telegram, phone or fax. However, debt collectors may not attempt to contact you at inconvenient times or places, such as before eight in the morning or after nine o'clock at night, unless you agree. Debt collectors may not contact you at work if they are aware that your employer disapproves of it..

Can you stop a debt collector from contacting you?

You can prevent debt collectors from contacting you by writing them a letter that demands them to stop. Once the debt collector receives this letter, they are not allowed to contact you again except to say that they will no be contacting you anymore or to notify you that they intend to take some specific action. Remember that sending a letter to a debt collector does not make the money owed to them go away. You may face a lawsuit by the collection agency or the original creditor.

May a collection agency contact anyone else about your debt

If you retained a lawyer, the collection agency must contact the lawyer, instead or you. If you did not hire a lawyer, the debt collector may attempt to contact other people, but only to locate your current address, phone number, and place of employment. Usually, debt collectors are prohibited from contacting third parties more than one time. In most cases, the collection agency may not explain your situation of owing money to anyone other than you and your lawyer..

What must the collection agency tell you about the debt?

After being contacted by the collection agency, the debt collector has five days to send a written notice explaining the amount of money you owe on a debt, the creditors name that you owe the debt, and what action you can take if the information is not correct.

Can a collection agency continue to contact you if you believe you do not owe a debt?

If within thirty days after you receive a written notice of a past due debt, a debt collector or agency may not contact you if you send the debt collector or agency a letter stating you do not owe any debt to them. However, a debt collector can begin collection activities again if you are sent proof of the debt you owe them. This could be a copy of a bill for the amount borrowed.

Read more on Debt Validation Explained

What types of debt collection practices are prohibited?

Debt collectors and agencies are not allowed to harass, oppress, or abuse you or any third parties they contact. This includes them using threats of violence or harm, publishing a list of consumers who refuse to pay their debts (except to a credit reporting agency), and using obscene or profane language or repeatedly using the telephone to annoy a person.

Debt collectors and agencies may not use any false or misleading statements when trying to collect a debt from you. This includes falsely implying that they are a lawyer or government representative, falsely implying that you have committed a crime, falsely representing that they operate or are employed by credit reporting agency, misrepresenting the amount of the past due debt, indicating that paperwork being sent out to you are legal forms when they are not or indicating that papers being sent to you are not legal forms when they are.

Debt collectors and agencies also may not imply that you can or will be arrested and serve jail time if you do not pay the money you owe them. They also may not imply that they will seize, garnish, attach, or sell your home or property, unless the collection agency, debt collector, or creditor intends to do so, and it is legal to do so. They are also not allowed to state actions such as a lawsuit when such a action legally may not be taken, or when they have no intentions to do so.

Debt collectors and creditors may not give anyone (includes credit reporting agency) false credit information about you or send you anything that looks like an official document from a court or government agency when it is not or use a false name.

Collection agencies may not use unfair practices when they try to collect money you owe them. For example, they may not try to collect any amount greater than your debt, unless your state law permits such a charge. They are also not allowed to deposit a post-dated check prematurely, use deception to make you accept collect calls or pay for telegrams, take or threaten to take your home or property unless this can be done legally. They are also not allowed to contact you by postcard.

What control do you have over payment of debts?

If more than one debt is owed, any payment you send them must be applied to the debt that you indicated. A collection agency or debt collector may not apply a payment to any debt you believe you do not have.

What can you do if you believe a collection agency violated the law?

Under the law, you have the right to file a lawsuit against the debt collector in a state or federal court within one year from the date the law was violated. If you win your case, you may be awarded money for the damages you suffered plus an additional amount of up to one thousand dollars. You can also sue them for the court costs and attorney's fees. A group of people also may sue a debt collector and recover money for damages up to five hundred thousand dollars, or 1% of the debt collector's net worth, whichever is less..

Where can you report a debt collector for an alleged violation?

Any problems you have with a debt collector or collection agency can be reported to the Attorney General's office in your state and the FTC. Many U.S. states have their own set of debt collection laws, and the office of the Attorney General can help you figure out what your rights are for your situation.

To file a complaint with the Federal Trade Commission or to get free information on consumer issues, visit their website or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

You may want to also read Statute Of Limitations Law on old past due debt.

Learn about Wage Garnishment Laws

Although all information has been written in good faith and reviewed, please email us at [email protected] to report any inaccuracies.