Definition
The Fair Debt Collection Practices Act (FDCPA) is federal legislation that protects debtors from abusive attempts to collect on defaulted debt.
Analysis
The FDCPA outlines the many protections that debtors have from abuses committed by debt collectors. Internal collections agents are not subject to regulation under this act. Outside collection agencies are regulated by the FDCPA.
The FDCPA prohibits collection agencies from:
- Calling debtors outside of regular hours (8:00 a.m. to 9:00 p.m.)
- Harassing debtors
- Calling a debtor’s employer after being advised to stop
- Calling family or neighbors in attempts to embarrass the debtor
- Reporting false credit information to credit bureaus
- Lying or trying to deceive the debtor
- Using abusive language
- Using intimidation
- Threatening illegal action
- Threatening legal action that the collector does not intend to take
- Refusing to honor requests to cease contact
The FDCPA also requires for debt collectors to take certain steps, such as to clearly indicate that they are attempting to collect a debt. This disclosure requirement must be made directly to the debtor verbally or in writing at each contact, with written forms required to be enclosed in a private letter.
Debtors also have right to sue for damages for violations of the FDCPA. Some state statutes specify remedies that debtors may take when a debt collector violates the FDCPA. These may include private mediation and the filing of formal complaints with the Federal Trade Commission.
Most collection agencies violate the FDCPA on a daily basis. Some violations are relatively minor, while others are severe and widespread. Debtors should understand provisions of the FDCPA so that they may adequately defend their rights as they try to resolve their financial situation.
