By Chris Watkins

As the economy continues to struggle along, thousands of people find themselves getting deeper and deeper into debt-related financial problems – credit cards, mortgages, car loans, and the list goes on and on.  When debt piles up, inevitably you will find yourself having to deal with debt collectors, who sometimes can be rude, deceptive, and abusive.  This article discusses a law passed by Congress as a means to curb such unfair collection practices – the Fair Debt Collection Practices Act.

TO WHOM DOES THE FDCPA APPLY?

The FDCPA generally does not apply to creditors collecting debts owed to them (with the exception described below).  It applies only to “debt collectors” – people whose business is to collect debts for others.  The term “debt collector” also includes any creditor who, while trying to collect his own debts, uses another name to suggest that a third person is collecting or attempting to collect the debt.

Besides creditors collecting for themselves, who else is not considered a “debt collector”?  The law contains several exceptions, including (a) any officer or employee of a creditor who is collecting debts in the name of the creditor for the creditor; and (b) United States or State officials to the extent that collecting debt is in the performance of his official duties.

WHO DOES THE LAW PROTECT?

The FDCPA applies to “consumer debt.”  In other words, it only protects debtors who are natural persons (i.e., human beings, as opposed to business entities), and only with regard to debt that was incurred in a transaction primarily for personal, family, or household purposes.  So if the debt was incurred for a business, or if the debtor is a corporation, LLC, or some other entity, then the FDCPA does not apply.

HOW DOES THE LAW PROTECT DEBTORS?

There are numerous ways in which the law protects consumers from abusive or deceptive behavior from debt collectors.  Here are a few of the key protections:

• Debt collectors cannot harass, oppress, or abuse any person in connection with the collection of a debt.  This means, among other things, that they cannot use or threaten to use violence; use profane or abusive language; publish a list of people who refuse to pay their debts; and call people on the phone repeatedly with the intent to annoy, abuse, or harass them.
• Debt collectors may not use any false, deceptive, or misleading statements or conduct. This would include, for example, falsely implying that he is an attorney; stating or implying that failure to pay a debt could result in the arrest or imprisonment of the debtor; or threatening to take any action that is not intended to be taken, or that is illegal.
• A debt collector cannot call a debtor at any unusual or inconvenient time or place without the debtor’s consent.  Generally this means that they cannot call before 8:00 a.m. or after 9:00 p.m., and must not call you at your workplace if they have reason to know that your employer prohibits such calls.
• Communication with third parties about the debtor is heavily restricted – for the most part it is limited to seeking information about the debtor’s location, and in doing so the debt collector must follow strict guidelines, including not disclosing that the he is collecting a debt.
• Within five days after an initial communication with a consumer about a collection matter, the debt collector must send the consumer a written notice containing the amount of the debt, the name of the creditor, and a statement that if the consumer notifies the collector within 30 days that the debt is disputed, the collector will send to the consumer verification of the debt.  If, within the 30 day time period, the debtor disputes the debt or asks the collector to validate the debt or provide the identity of the original creditor, then the collector must cease collection efforts until the information is provided to the debtor.

WHAT ARE THE LEGAL REMEDIES FOR VIOLATIONS OF THE FDCPA?

Violation of the FDCPA by a debt collector gives the debtor a civil claim against the collector for: (1) actual damages sustained by the debtor; (2) such additional damages as may be allowed by the court, up to $1,000; and (3) the costs of bringing the action, including reasonable attorney’s fees.  The suit must be filed within one year from the date on which the violation occurs.   The Federal Trade Commission also has the power to enforce compliance with the FDCPA.

HOW CAN AN ATTORNEY HELP ME?

Retaining an attorney is a very effective way to get a debt collector to stop harassing you.  The FDCPA states that a debt collector cannot communicate with a consumer or anyone else (family members, co-workers, etc.) in connection with the collection of a debt if the debt collector knows that the consumer is represented by an attorney with respect to such debt (unless the attorney fails to respond within a reasonable period of time to a communication from the collector).  An attorney can also help facilitate a settlement and hopefully help you avoid a lawsuit.  And of course, if a collector violates the FDCPA, an attorney can help you file suit against the collector.

CONCLUSION

If you are being harassed by debt collectors, be aware that you may have some protections available to you under the FDCPA.  The FDCPA does not relieve you from the responsibility to pay your debts, but it can give you some relief from endless phone calls and other abusive behavior.  For more information, the Federal Trade Commission (the government body responsible for enforcing the FDCPA) has published a Debt Collection FAQ for consumers, or contact our office to set up an appointment.