The Basics of Debt Collection

The Federal Fair Debt Collection Practices Act (FDCPA) was created to stop abusive debt collection practices.  According to the FDCPA, a debt collector is someone whose principal purpose is to collect debts or who regularly attempts to collect debts.  Generally the FDCPA applies only to third party debt collectors, not internal collectors for an original creditor. 

If a debt collector communicates with a person other than the consumer, the debt collector must identify themselves, but they do not have to disclose their employer, unless specifically asked.  Moreover, the debt collector cannot tell the third party that the debtor owes a debt nor can a debt collector send mail to a third party that divulges that the debtor owes a debt.  The debt collector is limited to asking the third party for the consumer’s location.  If the debt collector learns that the consumer has an attorney and can readily ascertain the attorney’s contact information, the debt collector cannot communicate with a third party to ascertain the consumer’s location, unless the attorney fails to respond within a reasonable period of time to the debt collector. 

Unless a debt collector has permission from a consumer or from the courts, they are limited in the manner that they can communicate with the consumer.  Without permission, a debt collector cannot communicate with a consumer

  • at an unusual place or inconvenient time (It is presumed that before 8am and after 9pm are inconvenient times.);
  • if the consumer is represented by an attorney and the debt collector knows this or the information regarding legal representation was readily ascertainable, unless the attorney fails to respond within a reasonable period of time; 
  • at the consumer’s place of employment, if the debt collectors knows or has reason to knowthat the consumer's employer prohibits the consumer from receiving such communication; and
  • if a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer,  except
  • to advise the consumer that the debt collector's further efforts are being terminated; or to notify the consumer that the debt collector or creditor may invoke or revoke specified remedies which are ordinarily used by such debt collector or creditor.

In addition to the above protections, a debt collector cannot harass a consumer.  This means that a debt collector cannot threaten to or use violence or any other criminal means to harm the consumer physically, the consumer’s property, or their reputation.  The debt collector cannot use profane or abusive language or publish the consumer’s name as owing a debt, except to a consumer reporting agency.  Nor can the debt collector threaten to sale the debt to force payment.  Debt collectors cannot continuously call a consumer to annoy or abuse the consumer or call a consumer without disclosing the caller’s identity.

Debt collectors may not use any false or misleading representations to collect a debt.  This means that the collector cannot make false claims

  • that they are vouched for, bonded by, or affiliated with the United States or any State;
  • about the character, amount, or legal status of any debt;
  • about any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt;
  • that the individual is an attorney or that any communication is from an attorney;
  • that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to lose any claim or defense or become subject to a prohibited practice;
  • representing or implying that the consumer committed any crime or other conduct in order to disgrace the consumer;
  • to collect or attempt to collect any debt or to obtain information concerning a consumer;
  • that accounts have been turned over to innocent purchasers for value;
  • that documents are legal process when they are not or that documents are not legal process when in fact they are legal process; or
  • that a debt collector operates or is employed by a consumer reporting agency.

Nor can the debt collector

  • state that the nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action;
  • threaten to take any action that cannot legally be taken or that is not intended to be taken;
  • communicate or threaten to communicate credit information which is known or which should be known to be false;
  • use any written communication that represents to be a document authorized, issued, or approved by a government agency;
  • fail to disclose in communications with the consumer the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose; or
  • use an organization’s name other than the true name of the debt collector's organization.

Debt collectors are also not allowed to use unfair or unconscionable means to collect or attempt to collect a debt.  This includes

  • collecting an amount not expressly authorized by an agreement;
  • accepting a check postdated by more than five days, unless the debt collector informs the consumer in writing of his intent to deposit the check or instrument not more than ten nor less than three business days prior to such deposit;
  • concealing the purpose of the communication;
  • taking or threatening to take a non-judicial action to obtain or disable the property if the debt collector does not have a right to do so or does not actually have an intent to; or
  • communicate by mail if the outside of the mail indicates a debt is owed.

When contacting a consumer, unless contained in the initial communication, a debt collector must send the consumer a letter detailing the amount of debt, to whom the debt is owed, and inform the consumer that within thirty days after receipt of the letter, if the consumer “disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.” Moreover, the letter must contain a statement that unless the consumer disputes the debt or part of the debt in writing, “the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.” Lastly, the letter should state that “upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.”

If the consumer notifies the debt collector in writing within the thirty-day period that he or she is disputing all or a portion of the debt or requests the name and address of the original creditor, the debt collector has to stop collection actions until they verify the information that they are requesting.  If the consumer decided to pay part of the alleged debt, the debt collector cannot apply the payment to any disputed amount.

If a debt collector violates any of the protections afforded to the consumer they can be held liable for civil damages. However, if the debt collector can prove that their action was not intentional and resulted from a bona fide error, they may be able to avoid liability. 

There is an abundance of law that may be to be used to strengthen an individual’s or a company’s chance of success in a debt collection matter.   An attorney versed in this sort of law can be a valuable asset.  If you need legal assistance with a debt that is being collected, contact the Law Office of Phillip E. Chalker at phillip@attorneychalker.com or (443) 961-7345.