Whether you owe a few hundred dollars or tens of thousands to a debt collector, you may be on the receiving end of some frustrating phone calls. Unfortunately, this is one of the many harsh realities of being in debt to a third party. Collectors seem to follow you everywhere.
This is a significantly stressful situation for thousands of Americans each day. Data actually shows that 73% of American consumers die in debt. Of that 73%, the most common debts were credit card balances, mortgages, auto loans, personal loans, and student loans, in that specific order.
The Federal Trade Commission (FTC) exists for the protection of the consumer. This is why they have brought this act into law. The Fair Debt Collection Practices Act (FDCPA) actually protects you from some of the unfair tactics collectors use against you. It basically dictates how collectors should interact with you, and what they should and shouldn’t ask for. If they break the rules, they get a citation. Not only that, FDCPA ensures you have certain rights in the marketplace.
Here’s what you need to know about debt collectors that have to follow FDCPA rules.
FDCPA Rules About Calling
First of all, The Fair Debt Collection Practices Act considers repeated or continuous calls harassment.
Secondly, collectors should only call you during certain times of the day. If they attempt to contact your home before 8 AM or after 9 PM, be sure to log the time to provide as proof later on. More than that, if a collector is calling you during a time they know is inconvenient to you, that is also out-of-bounds behavior.
The FDCPA also has rules about contacting you at work. So if they know your employer does not approve your accepting these calls on company time, this is also a violation of the act.
Debt collectors should never repeatedly call a third party in an attempt to get your location information. In fact, the only time a collector should contact a third party is if they have reason to believe your current contact information is either outdated or false.
FDCPA Rules About Payments
There are many reasons why an individual would get into debt. This includes car payments, medical bills, or an unfortunate circumstance, such as divorce. No matter the cause, there is never a reason you should pay more than the amount of money owed. Further, a collector should not add on extra fees, expenses, or “taxes” attached to the original loan agreement.
You’d be surprised to know that it’s not uncommon for collectors to “double dip,” which is an illegal practice. This is when they attempt to collect on a debt that you settled long ago.
FDCPA Rules About Communications
Debt collectors should conduct themselves in a certain manner when they contact you. Any communications that are considered profane, abusive, or obscene should immediately be reported. Using threatening or violent tactics is absolutely against the law. This includes screaming at or belittling consumers. Keep in mind that debt collectors do not represent the government or any government entity, so they cannot bring in law enforcement agents, such as the police, against you.
Collectors can only go so far in an attempt to collect money. They cannot legally sue you or your family, they cannot file charges, and most importantly, they cannot claim your property or garnish your wages. Any person who claims they can ruin your credit (or threaten to ruin your credit) is lying and cannot take action in this way. They also cannot threaten to take away your home, car, or items of value on your property, including liens on your property. To do this, a collector would have to sue and win a case in court first.
When a collector leaves a message on your voicemail or answering machine, they must state their name and the company they represent.
You should know that you are allowed a certain amount of privacy when it comes to debt. This means a collector cannot inform a third party about how much you owe, unless you have given them your explicit permission beforehand. Here are the parties collectors are allowed to contact:
- Your spouse
- Your attorney or lawyer
- Your creditor or creditor’s attorney
- A credit reporting agency
- Your parent (only if you are a minor)
FDCPA Rules About Debt Verification
So how can you stop a collector from contacting you? Consumers have the right to tell their debtor in writing. It is recommended that you make a copy of the letter before sending the original by mail. You can even pay for a return receipt to ensure they actually received it. When they do, they cannot contact you again, except in these two cases:
- To inform you that there will be no further communications from their agency
- To inform you that they intend to take an action in relation to the debt, such as filing a lawsuit
Keep in mind that sending this letter does not erase the debt owed or prevent them from suing you in the future.
In terms of verification, a collector must send something called a “validation notice.” This is a written letter stating how much you owe within five days after their initial contact. It must include the name of the creditor and how to move forward if you believe you have been wrongly charged.
If you tell the collector you don’t owe them money, or if you ask for debt verification, they should stop communicating with you. However, you must let them know within a 30 day period. They can begin calling you again if they send a written verification, such a copy of the bill.
What to do if Your Rights are Violated
After reading this list, you may realize that your collector is involved in some shady business practices. So what are your next steps? Here’s who to contact to report an alleged violation:
- Your state Attorney General’s office
- The Federal Trade Commission
- The Consumer Financial Protection Bureau
Be aware that different states have different laws, but your state’s Attorney General office should assist you in understanding your rights. If what they are doing is deemed unlawful, that party is responsible for damages up to $1,000. They are also required to pay your lawyer’s fees and costs.