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Know Your Rights: The Fair Debt Collection Practices Act (FDCPA)September 22, 2020 / by Michael McEldowney, J.D / 4 min read
When you’re being threatened or harassed by debt collectors, it’s easy to get discouraged. Most people who are behind on their bills and have debts in collection are already under stress.
Whether you’re short on money because of a major setback like a divorce or long illness, you’ve lost your job, or you just slowly lost control of mounting fees and interest, you’re in a tough spot. The last thing you need is a debt collector calling you several times a day or making crazy threats.
The worst part is that the debt collectors who use those high-pressure and often dishonest tactics do so because it works. They dial up the stress hoping you’ll get nervous enough to stop thinking strategically. Then, they can pressure you into paying more money than you can afford. Often, that means paying a debt buyer on a closed credit card account or some other low-priority bill while critical payments like your mortgage or utilities fall further behind.
Fortunately, the federal Fair Debt Collection Practices Act (FDCPA) offers powerful protections for consumers plagued by abusive or dishonest debt collectors. Here’s what you need to know to protect yourself.
Who is a Debt Collector?
One important thing to keep in mind is that the FDCPA applies only to third-party debt collectors. That means original creditors like your credit card issuer, loan company, or doctor’s office isn’t bound by the FDCPA. Instead, the statute sets forth rules for people and companies in the business of collecting debts owed to others. The most common examples are collection agencies and debt buyers.
Consumer Protections Under the FDCPA
The FDCPA protects consumers in two separate ways. First, the statute requires debt collectors to do certain things that make it easier for a consumer to know whether or not they really owe the debt and to dispute the debt if they do not.
These include obligations to:
- Identify themselves as a debt collector in all communications
- Provide written notice of basic information about the debt, and
- Notify you in writing of your right to dispute the debt
Once they receive a dispute letter, further obligations kick in. If you send the dispute letter within 30 days of the first communication, the debt collector can’t continue collection actions while investigating your dispute. One benefit DebtCleanse members receive is unlimited access to a library of dispute letter templates to facilitate this process.
The FDCPA also includes a long list of prohibitions on abusive and deceptive tactics.
Abusive and Deceptive Collection Practices
Under the FDCPA, debt collectors may not harass, abuse, or mislead consumers in their attempts to collect. This protection is quite extensive. Some common debt collector tactics that are prohibited under the FDCPA include:
- Sending documents that are designed to look like they’ve come from law enforcement, a court, or another official source
- Threatening to file a lawsuit when they cannot do so or are not planning to do so
- Misleading the consumer about the legal status of a debt--for instance, a debt that is outside the statute of limitations and cannot be collected through a lawsuit
- Repeatedly calling the consumer for purposes of harassment
- Calling outside acceptable hours, typically meaning before 8:00 a.m. or after 9:00 p.m.
- Contacting the consumer’s friends or family, except to ask for contact information if they are unable to locate the alleged debtor
- Continuing to call the consumer’s place of business after being advised of the employer’s objection
- Continuing to call or send letters after the consumer has sent a written request to cease communications (limited exceptions apply)
- Using profanity or obscene language in an attempt to collect a debt
- Threatening violence or other illegal activity
What Happens When a Debt Collector Violates the FDCPA?Often, dishonest or abusive debt collectors get away with bad behavior. That’s because most consumers don’t know their rights or how to fight back when debt collectors and debt buyers break the law. You’ve already given yourself a leg up by educating yourself about the restrictions on debt collectors and debt buyers.
The FDCPA provides for two different types of damages. Actual damages can be awarded when the consumer suffers losses because of the debt collector’s actions. For example, a debt collector might repeatedly call a consumer at work, knowing that she was not allowed to receive personal calls on the job. If the consumer got fired as a result, the debt collector might be held liable for her lost income.
The other, more common type of damages under the FDCPA is known as “statutory” damages. That’s because they’re not actual damages, but a damage award created in the statute. Under the FDCPA, a court can award up to $1,000 in compensation even if the consumer doesn’t show any actual damages. The statute also says a debt collector who violated the law has to pay the consumer’s attorney fees.
The bottom line is that a debt collector who breaks the law may be required to pay damages and attorney fees. And, because that creates a risk for the debt collector, FDCPA violations can give a consumer bargaining power when it comes to settling the underlying debt. But, those opportunities are lost when you don’t know your rights or how to assert them.
Protect Yourself Against Debt Collector Abuses
Fortunately, it’s easy to get knowledgeable guidance. When you join DebtCleanse, you’ll have unlimited access to a consumer advocate attorney who will help you stand up for your rights and help you file any complaints. Take the first step today – register now!