What Is the Fair Debt Collection Practices Act?

If you’re constantly getting hassled by debt collectors, you might be left feeling helpless and anxious. Maybe you’ve thought about putting an end to these relentless phone calls but didn’t know how. The Fair Debt Collection Practices Act (FDCPA) exists to protect us from unfair and abusive debt collection practices. 

In the following sections, we will discuss the FDCPA in greater detail so that you can feel better equipped to deal with debt collectors. If your situation fits the criteria, there may be something you can do about it.

What is the Fair Debt Collection Practices Act?

The Federal Debt Collection Practices Act (FDCPA) places restrictions on how third-party debt collectors act to handle situations in which they are trying to collect debts owed to another person or entity. 

This federal law limits the ways that collectors are legally allowed to make contact with those who owe. These restrictions include rules surrounding what time of day debt collectors are allowed to contact debtors as well as how many times they are allowed to contact them. 

If your rights, according to the FDCPA, have been violated, you have one year to file a lawsuit against the debt collection company as well as the individual debt collector. 

How the Fair Debt Collection Practices Act Protects You

The FDCPA was established to protect consumers from unfair debt collection practices such as being called at odd hours of the night, being harassed, and being wrongly accused of owing a debt. This federal law puts control back in your hands so that you can feel more confident about your interactions with debt collectors.

Here are some of the ways that this law protects you:

You are in charge of the communication: You have the power to place restrictions on when and how you are contacted by debt collectors. By law: 

  • Debt collectors are not allowed to contact you at inappropriate times such as early in the morning (before 8 a.m.) or late at night (after 9 p.m.).
  • You can request to not be contacted while at work.
  • You may choose to have an attorney represent you, in which case, the debt collectors would have to communicate with them. 
  • Debt collectors are not allowed to discuss your debts with family members, employers, family, neighbors or other third parties. 

If you have any specific demands for how you want the communication to flow between you and the debt collectors, you will need to form a written request. Under the FDCPA, any requests made over the phone will not be valid. For some guidance on what your letter should look like, take a look at the Consumer Financial Protection Bureau website to view some examples. 

Debt collectors can NOT harass or use abusive language/behavior towards you:  In the game of unpaid debts, things can get really ugly, really fast. No one likes to be asked to pay back money they owe over and over again, but there is a fine line between asking and harassment. It starts to become harassment once the debt collector starts to use misleading language or fear tactics in order to get you to do what they want. Some examples of this could include but are not limited to:

  • Using profanity.
  • Calling excessively and repeatedly.
  • Threats or violent language. 
  • Calling without properly identifying themselves. 

In many cases, this type of hostile behavior is indicative of a scam. The last thing you want to do is give your money to a scam debt collector. Be wary and observant of this so that you do not make this mistake. Jot down any instances where this behavior has occurred and use it to file your claim.  

Debt collectors must be honest: Debt collectors lying to you about how much you owe, what consequences you will face is something that the FDCPA does not tolerate. Debt collectors must not mislead or lie to you about:

  • How much you owe.
  • Whether or not it is past the statute of limitations.
  • Legal consequences/punishments if you do not pay. 
  • The company they are representing. 

Debt collectors are always obligated to be truthful about your debt situation, but they also have a right to say nothing at all. If you find yourself unable to get information from your debt collector, it might be in your best interest to seek out advice from a legal agency in your neighborhood.

Debt collectors have to play fair: In desperate situations, some debt collectors might resort to making threats to coerce you into paying your debts. Some examples of this type of behavior may include but are not limited to:

  • Asking you to write a postdated check to cover the debt.
  • Threatening to deposit or depositing your postdated check prior to its date. 
  • Threatening to take ownership of your assets as payment. 
  • Asking for and accepting more money than what is actually owed. 

Debt collectors are required to validate your debt: They will have to send you a validation letter to prove that you are responsible for the debt they are asking for. If you still feel like you need additional information, you may also request a verification letter. In accordance with the FDCPA, debt collectors have five days to send you a validation letter once they first make contact with you. The letter must state:

  • The amount of debt you owe.
  • The name of the creditor/entity that you owe payment to. 
  • That the collector will assume the debt is valid unless it is disputed during the allotted 30-day timeframe. 
  • That you are entitled to request additional information regarding the original creditor within 30 days of the first contact.
  • That if you choose to dispute the debt, you must submit a written request within 30 days. 

Final Thoughts

In the unfortunate circumstance that your rights are violated, you basically have two options. You can either file a complaint or sue the collection agency. Filing a complaint is pretty simple. In fact, a majority of the complaints received by the Consumer Financial Protection Bureau (CFPB) are regarding violations of the Fair Debt Collections Practices Act. 

The best thing you can do is keep a detailed record of the abusive practices to help prove your case. A lot of times, this malpractice occurs over the phone and can be hard to prove. Save evidence of all the phone calls, what time they took place, and notes about what was said. The more information you have about what happened, the better chance you have at proving your claim.

What Is the Fair Debt Collection Practices Act? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

The Worst Ways to Deal With a Bill Collector

The Worst Ways to Deal With a Bill Collector

Dealing with a bill collector is never fun and it can be particularly stressful when you’re sitting on a mountain of debt. Sometimes debt collectors fail to follow the rules outlined in the Fair Debt Collection Practices Act. If that’s the issue you’re facing, it might be a good idea to file a complaint. But if you’re personally making any of these mistakes, your debt problem could go from bad to worse.

Check out our credit card calculator.

1. Ignoring Debt Collectors

Screening calls and avoiding bill collectors won’t help you get your debt under control. Debts generally have a statute of limitations that varies depending on the state you live in. Once it expires, the collector might not be able to sue you anymore. But you could still be responsible for paying back what you owe in addition to any interest that has accumulated.

In addition to the potential legal consequences of unpaid bills, letting old debt pile up can destroy your credit score. Unpaid debts can remain on a credit report for as many as seven years. So if your debt collector is getting on your last nerves, it might be best to stop hiding and face him head on.

2. Saying Too Much Over the Phone

The Worst Ways to Deal With a Bill Collector

If you decide to stop dodging your bill collectors, it’s important to avoid sharing certain details over the phone. You never want to say that you’ll pay a specific amount of money by a deadline or give someone access to your bank accounts. Anything you say can be used against you and agreeing to make a payment can actually extend a statute of limitations that has already run out.

A debt collector’s No. 1 goal is to collect their missing funds. They can’t curse at you or make empty threats, but they can say other things to try and scare you into paying up. Staying calm, keeping the call short and keeping your comments to a minimum are the best ways to deal with persistent bill collectors.

Related Article: Dealing With Debt Collectors? Know Your Rights

3. Failing to Verify That the Debt Is Yours

When you’re talking to a bill collector, it’s also wise to avoid accepting their claims without making sure they’re legitimate. Debt collection scams are common. So before you send over a single dime, you’ll need to confirm that the debt belongs to you and not someone else.

Reviewing your credit report is a great place to start. If you haven’t received any written documentation from the collection agency, it’s a good idea to request that they mail you a letter stating that you owe them a specific amount of money.

If you need to dispute an error you found on your credit report, you have 30 days from the date that you received formal documentation from the collection agency to notify them (in writing) that a mistake was made. You’ll also need to reach out to each of the credit reporting agencies to get the error removed. They’ll expect you to mail them paperwork as proof of your claim.

4. Failing to Negotiate the Payments

The Worst Ways to Deal With a Bill Collector

No matter how big your debts, there’s usually room for negotiation when it comes to making payments. If the payment plan your bill collector offers doesn’t work for you, it’s okay to throw out a number you’re more comfortable with.

Sometimes, it’s possible to get away with paying less than what you owe. Instead of agreeing to pay back everything, you can suggest that you’re willing to pay back a percentage of the debt and see what happens. A non-profit credit counselor can help you come up with a debt management plan if you need assistance. Whatever you agree to, keep in mind that the deal needs to be put in writing.

Related Article: All About the Statute of Limitations on Debt

5. Failing to Keep Proper Documentation

Whenever you communicate with a bill collector, it’s a good idea to take notes. Jotting down details about when you spoke with a collector and what you discussed can help you if you’re forced to appear in court or report a collector who has broken the law. Collecting written notices from bill collectors and saving them in a folder can also help your case.

Bottom Line

Dealing with bill collectors can be a real pain. By knowing how to interact with them, you’ll be in the best position to get rid of your unpaid loans and credit card debt (that is, if you actually owe anything) on your own terms.

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