Federal Fair Debt Collections Act
In 1978, The U.S. Congress passed the Federal Fair Debt Collections Act to eliminate abusive, deceptive and unfair debt collection practices while also providing rights, protections and remedies for debtors. The act applies to consumer debts incurred for personal, family or household purposes, but not business debts.
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Identification
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A debt collector, sometimes called a collection agency, is any person or organization that regularly collects or attempts to collect defaulted consumer debts on behalf of creditors (the entity that originally granted credit to the consumer). Under the act, debt collectors also include attorneys who regularly collect debts and creditors engaged in collecting debts under a different name or by sending letters signed by an attorney.
Permitted Actions
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Collectors can report your defaulted account to a credit reporting agency (also called a credit bureau) and file a lawsuit against you to collect the debt. After a collector contacts you the first time, within five days it must send you written notice telling you how much money you owe, the name of the creditor to whom you owe the money and what to do if you don't think you owe the money. In attempting to collect the debt, collectors also can contact your attorney, your spouse, co-signers, credit reporting agencies and the original creditor.
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Prohibited Actions
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A debt collector can contact you, your spouse and your attorney about your debt. It cannot communicate with a third party---someone who might know how to locate you, such as a friend, neighbor, co-worker or employer---unless you or a court has given it permission to do so, or if the purpose of the contact is to locate you. In that case, it cannot reveal to the third party that it is attempting to collect a debt from you.
Collectors only can communicate with you from 8 a.m.-9 p.m., in your time zone, cannot engage in any threatening or harassing behavior and cannot falsely represent their identity or authority. Collectors also cannot engage in unfair practices such as adding unauthorized fees or interest, or by placing a symbol or logo on the outside of an envelope that indicates it is a debt collector.
Stopping Collectors
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If you write a letter to the collector requesting that it stop contacting you, it must do so. It cannot contact you at work if you tell it that your employer does not allow personal calls, and if it knows you are represented by an attorney, it cannot contact you without your permission.
You have other options, such as trying to negotiate a payment plan, but you must be realistic about what you can afford to pay each month. A reputable credit counseling service might be able to assist you in communicating effectively with the collector. If you believe you do not owe the debt, or if there are other errors on your billing statement or collection letters, you have the right to dispute it under the Fair Credit Billing Act.
Violations
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If the collector is violating the act, you can take action against it by filing a lawsuit against the collector or complaining to the original creditor about the collector's tactics. The creditor might be concerned about its reputation or potential liability. You also can file a complaint with the Federal Trade Commission, which enforces the act.
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References
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