Debt Collection & Federal Law
Although there are many aspects of federal law that pertain to debt collection, none is as important or as widely enforced as the Fair Debt Collection Practices Act, or FDCPA. The Federal Trade Commission strictly enforces the FDCPA to protect debtors. Any creditor, whether a law firm, collection agency, or business catering to consumers, is subject to the laws and regulations of the FDCPA.
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Function
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The purpose of the Fair Debt Collection Practices Act is to protect debtors from harassment caused by creditors. The consumer protection agency for the United States, the Federal Trade Commission, created and enforces the FDCPA, keeping collectors from using deception, abuse or unfair tactics to collect a debt. It derived from the fact that many collectors were taking advantage of debtors to collect debts, including making threats of lawsuit or even violence, or calling numerous times in one day and at inappropriate hours.
Types
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The Fair Debt Collection Practices Act covers debts by consumers/individuals, but not businesses. It includes personal and family debts. These debts can be anything, including a mortgage, car loan, credit card account, other loans, or unpaid bills.
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Time Frame
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According to the FDCPA, debt collectors cannot contact you whenever and wherever they want to. They may contact you by telephone only between 8 a.m. and 9 p.m. If you inform collectors verbally or in writing not to contact you at work, the Fair Debt Collection Practices Act prohibits them from calling you there.
Communication
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Per the FDCPA, debt collectors cannot discuss your debt with anyone else. The only exception is if you have an attorney representing you, in which case collectors must communicate only with the attorney; or if you give the collector written approval to discuss the debt with someone in your family.
Additionally, according to Section 809 of the Fair Debt Collection Practices Act, the debt collector must send the debtor written information regarding the debt that must include the amount of the debt and the owner of the debt, and must give the debtor 30 days to contact the collector regarding payment arrangements or to dispute the alleged debt.
Validation
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Debtors have the right to request validation of the alleged debt, and to dispute the debt. This must be done in writing. Upon receipt of such documentation, the debt collector must cease communication with the debtor and provide documented proof of the debt, such as a copy of the last unpaid bill or credit card statement, or a copy of a loan contract. Once the debtor receives such documentation, the collector may resume communication in an effort to collect the debt.
Prohibited
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The FDCPA prohibits collectors from using harassment as a means of collection, including threats of violence or arrest, profane language, repeated telephone calls or publishing a list of names for those who refuse to pay debts.
Collectors cannot give false information to a debtor about who they are and what they can do, and they cannot provide false information about a debtor to credit bureaus. They cannot garnishee a debtor's wages or attach or sell assets, unless permitted through court process. They cannot deposit a postdated check early, send debtors forged court documents, or use a false company name.
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