Your Fair Debt Collection Practices Act Rights

November 9, 2018

Our readers know that falling into debt is something that can happen to just about anybody. People take on debt for any number of reasons – unexpected expenses, emergencies, business ventures, and so forth. Given the wide range of reasons why people go into debt, it should be no surprise that the federal government has regulated debt collection.  Specifically, the government has developed laws designed specifically to protect debtors from abusive collection practices.  It’s called the Fair Debt Collection Practices Act.  It’s worth knowing about.

We’ve likely all heard at least one debt collection horror story.  The late at night phone call demanding immediate payment in an angry voice.  Multiple collection calls at one’s place of employment which lead to workplace issues.  Calls which threaten that nonpayment will lead to immediate involvement from law enforcement. These types of stories are all too common, and they are precisely why the U.S. Congress passed the Fair Debt Collection Practices Act, or FDCPA.

The FDCPA imposes standards on the collection practices of creditors in order to protect consumers from abuse. Collectors who violate the Fair Debt Collection standards face stiff consequences for doing so. As much as it is important for collectors to be aware of the boundaries imposed on their collection practices, it is equally imperative that debtors understand their rights. In this post, we will spell out the rights which the FDCPA confers on debtors.

Basics of the FDCPA 

The FDCPA applies to third-party debt collectors pursuing debts on behalf of creditors. Any entity which collects debts as a principal part of its business activity falls under the purview of the FDCPA. This means that not only will debt collection companies fall under the FDCPA, but also law firms, accounting firms and other entities that pursue debt collection on behalf of clients as a primary source of business. Importantly, the FDCPA does not cover creditors themselves. If a belligerent creditor pursues you aggressively for debts, that creditor will only be bound by the specific state or local laws which cover debt collection behavior.   If, however, a debt collection company or other collection entity violates the fair debt collection provisions, both the entity, and the individual collector within that entity, may be penalized.  

Most consumer debts are covered by the FDCPA.  That includes personal loans, credit card debts, automobile loan debts, student loan debts, medical debts, and others. The main type of debt NOT covered by the FDCPA is business debt.  Business people who’ve taken out business loans need to be aware of this fact. 

Rationale for Fair Debt Collection

The FDCPA grants debtors certain rights which they may assert in order to prevent abusive and belligerent behavior. The rationale underlying the FDCPA is two pronged.  The first is the moral justification.  The second is more practical.  Undesirable collection practices only harm a debtor’s ability to fulfill his or her financial obligations.

Debtor Rights Under the FDCPA 

The first main right given by the FDCPA relates to when a collector may attempt to contact a debtor. Collectors may not attempt to contact debtors during “inconvenient times” without express approval from the debtor. In plain English, that means anytime before 8 am or after 9 pm. If a collector contacts a debtor outside of this accepted window without clear permission, that contact will constitute a violation of the FDCPA.

The next right granted by the FDCPA relates to where a collector may attempt to contact a debtor. Collectors may contact debtors at either their personal residence or place of employment, but debtors may request that collectors cease contacting them at either of those places. To cease contact at their place of employment, debtors need to make that request either orally or in writing.  To cease contact at their home, however, debtors must make that request specifically in writing.

In addition to the foregoing rights, the FDCPA also provides debtors with protection against particular kinds of behavior. For example, collectors cannot threaten debtors with bodily harm, nor can they allege that nonpayment will result in arrest or police involvement. Furthermore, collectors can’t threaten a lawsuit, unless they make it clear that they seriously intend to initiate suit in the event of nonpayment.  Phrased differently, collectors can’t use idle threats of a lawsuit to compel payment.  

Call Us For Help

Clearly, it’s in the interest of every consumer to be aware of their Fair Debt Collection Practices Act rights. Many of us may find ourselves in financial trouble at some point.  Despite that, no one should be harassed or treated cruelly as a result. If someone you know encounters behavior that runs afoul of the FDCPA,  contact Mackay, Caswell & Callahan, P.C.  One of our New York City tax attorneys will be happy to help.  Just give us a call and we’ll take the time to review your matter immediately. 

Image credit: Christian Schnettelker

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