Your Rights Under the Fair Debt Collection Practices Act

Dealing with debt collectors can be super stressful. You’re already struggling financially, and now some aggressive person is calling nonstop demanding payment. It’s enough to make anyone feel anxious or hopeless.

But here’s the good news – you have rights when it comes to debt collection. There are laws that protect you from harassment and abuse. As a consumer, you have power in these situations.

This article will explain your rights under the federal Fair Debt Collection Practices Act (FDCPA). We’ll go over what debt collectors can and can’t do, what information they must provide, and how to get them to stop contacting you. Let’s dive in!

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (FDCPA) is a federal law passed in 1977 that regulates the practices of third-party debt collectors. It applies to any business that regularly collects debts owed to others, like credit card companies, banks, collection agencies, etc.

The law prohibits debt collectors from using abusive, deceptive or unfair practices when trying to collect a debt. It also requires them to provide consumers with information about the debt and gives you certain rights to dispute debts and set limits on how you are contacted.

What Debts are Covered by the FDCPA?

The FDCPA generally covers personal, family, and household debts like:

• Credit card debt
• Medical debt
• Auto loans
• Mortgages
• Payday loans
• Other unpaid bills

It applies to debts you owe or allegedly owe. The law covers collection on debts that you actually owe, as well as those you don’t owe where the collector is mistaken.

The FDCPA does not cover debts you owe to an original creditor. So if you’re behind on your credit card bill, the card issuer contacting you directly is not covered. The law only applies to third-party debt collectors.

When Does the FDCPA Apply?

The FDCPA covers third-party debt collectors who regularly collect debts owed to others. This includes:

• Collection agencies
• Debt buyers (companies that purchase old debt for collection)
• Lawyers who regularly collect debts
• Loan servicers

It does not apply to the original creditor. So if you owe your credit card company money, they are not bound by the FDCPA when trying to collect from you.

The law also does not cover creditors collecting their own debts under their own business name. For example, if you have a retail store credit card and fall behind on payments, the store can contact you directly because they are the original creditor.

The FDCPA focuses on third-parties who are collecting debts they did not originate. These types of collectors tend to use more aggressive tactics, which is why additional protections are needed.

What Are Debt Collectors Prohibited from Doing Under the FDCPA?

The Fair Debt Collection Practices Act prohibits debt collectors from engaging in harassing, abusive, deceptive, or unfair practices when collecting debts. Here are some key things they CANNOT legally do:

• Call you before 8am or after 9pm in your time zone
• Contact you at work if you’ve told them your employer prohibits it
• List your debt on credit reports after you’ve disputed it in writing
• Tell anyone other than you, your spouse, or attorney that you owe a debt
• Contact you after you send a written cease communication notice
• Misrepresent the amount you owe
• Falsely claim to be an attorney or law enforcement officer
• Threaten you with violence, arrest, or criminal prosecution
• Use obscene or profane language
• Repeatedly use the phone to annoy you
• Publish lists of consumers who refuse to pay debts
• Seek payment without providing written notice about the debt

This is not a complete list, but it covers some of the major tactics prohibited under the law. The FDCPA essentially bans any harassing, oppressive, false or misleading conduct by collectors.

What Information Must Debt Collectors Provide?

Under the Fair Debt Collection Practices Act, debt collectors must provide you with certain information about the debt they are trying to collect. This information is known as “validation notice.”

The validation notice must include:

• Amount owed – They must tell you the total amount of the debt, including any interest or fees.
• Name of the creditor – They have to tell you who you originally owed the debt to.
• What to do if you don’t think it’s your debt – They must notify you of your right to dispute the validity of the debt within 30 days of getting the notice.
• Notice that they are attempting to collect a debt – This seems obvious but they have to disclose that it is communication for debt collection purposes.

You should receive the validation notice within 5 days of the collector’s first communication with you. This could be on a phone call, in a letter, or on the initial written notice about the debt.

If you do not get the required validation notice, the collector cannot continue collection activities until it is sent.

Can I Stop Debt Collectors from Contacting Me?

Yes, you have the right under the FDCPA to send a written request for debt collectors to stop communicating with you. This is known as a “cease and desist letter.”

Once a collector receives your cease and desist, they can only contact you one additional time. That contact should confirm they will stop communication as you requested. After that, all contact must stop.

The only exceptions would be if they need to tell you about a specific action they plan to take, like filing a lawsuit against you. Or if you initiate further communication and fail to request that they stop again.

To stop communications, your request must be made in writing and sent to the debt collector. Keep a copy for your records.

How to Dispute and Verify a Debt

If you believe a debt collector is pursuing you for a debt that you don’t owe, you have the right to dispute it under the FDCPA. You may not recognize the creditor they name or could be confused by the amount they claim you owe. When this happens, take action quickly to get more information.

You’ll need to dispute the debt in writing within 30 days of receiving the validation notice. Explain why you dispute all or part of the debt. The collector must then stop all collection efforts until they send you proof that verifies you actually owe the amount they claim.

This verification should include documents like the original credit agreement or bill for the exact amount owed. Review the verification carefully. Make sure the amount and creditor named match what you think you may owe. If the collector can’t verify details to your satisfaction, you can send another dispute letter.

Disputing debts promptly is important to avoid damage to your credit reports. The Fair Credit Reporting Act says debt collectors can’t report disputed debts to the credit bureaus. So disputing stops negative information from being added while you sort out who you actually owe.

Can I Negotiate With a Debt Collector?

Yes, you can negotiate payment plans or reduced balances with debt collectors. Collectors may accept lower lump-sum settlements because they want to recoup at least part of the debt. Let them know if you’re experiencing financial hardship due to job loss, medical bills, etc. and offer what you can realistically afford.

Get any negotiated payment plans or settlements in writing before sending money. Debt collectors sometimes agree verbally to things they later deny. Protect yourself with written confirmation.

If you and the collector can’t agree on settlement terms, you may need to consider credit counseling or bankruptcy if debts are unmanageable. Don’t let collectors pressure you into accepting payments you simply can’t handle.

How to Report FDCPA Violations

If a debt collector violates the Fair Debt Collection Practices Act, you can report them to the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB). These agencies enforce the FDCPA and can take action against debt collectors who break the law.

You can file complaints with the FTC online at FTC.gov or by calling 877-FTC-HELP (877-382-4357).

To submit a complaint to the CFPB, go to consumerfinance.gov/complaint or call 855-411-CFPB (855-411-2372).

When reporting a violation, provide details like the collector’s name, company, phone number, what happened, dates and times of calls, etc. The more specifics you can give, the better.

You should also contact your state attorney general’s office to report violations of the FDCPA or applicable state laws. They have authority to investigate illegal practices in your state.

Can I Sue a Debt Collector for FDCPA Violations?

Under the Fair Debt Collection Practices Act, you have the right to sue a debt collector in state or federal court for violations. If you win, you may recover money damages for:

• Actual damages – This covers any financial losses you suffered due to the debt collector’s illegal actions, like lost wages or medical bills.
• Statutory damages – Even if you don’t have actual damages, you can recover up to $1,000 in statutory damages per violation.
• Punitive damages – The court may award additional punitive damages to punish the debt collector for intentional or reckless violations.
• Attorney’s fees and court costs – The debt collector will have to pay your reasonable attorney’s fees and court costs if you win.

You have one year from the date the FDCPA violation occurred to file a lawsuit in state or federal court. It’s helpful to keep detailed records of all communications and encounters you have with debt collectors as evidence.

Suing can stop FDCPA violations and hold collectors accountable. But lawsuits take time and money. First consider reporting violations to the FTC and CFPB. If a collector is violating the law with others, regulators can take action to stop them through fines or shutting them down.

You could also use FDCPA violations as leverage to negotiate a lower settlement on the disputed debt. Collectors may offer a discounted lump sum payment to avoid litigation over their illegal practices.

If the violations are egregious, a lawsuit may be your best recourse. Consult a consumer protection attorney to understand if you have a strong case. They can provide guidance on the likelihood of success and potential damages you could recover.