Blog

Key Aspects of Fair Debt Collection

In a previous post, we discussed some of the basic points of debt consolidation. We continue here with this same general theme.  In this post we also examine debt, but we will do so from a different angle. As we mentioned before, debt is a significant force in American life.  That’s true for a number of different reasons.  Many Americans feel compelled to take on debt for one reason or another.  It’s not uncommon for debt to literally alter the course of a person’s life. Discussions concerning debt tend to focus on the debt itself.  But what about debtors? It’s important to remember that, no matter its size or impact, debt is most meaningful to the people that owe it.  We as a society need to to have a system in place to assist them, the debtors.  Specifically, we need to ensure that fair debt collection practices exist and are enforced.  

One law does tat.  It which focuses more on debtors rather than the debt itself.  It’s called the Fair Debt Collection Practices Act, or FDCPA. The FDCPA, which was first implemented in 1978.  It’s  intent is to provide debtors with a channel for challenging the validity and accuracy of debts.  It also imposes certain ethical guidelines, or fair debt collection practices.  These guidelines are for  third-party debt collectors attempting to collect a debt. The FDCPA outlines who qualifies as a “debt collector” for the purposes of the Act.  It also sets specific boundaries for collectors attempting to contact debtors. In this post, we will cover the basic provisions of the FDCPA.  We’ll also highlight the benefits that the Act gives to consumers. As we’ll see, the FDCPA is truly a benign piece of legislation.  We feel that it’s legislation that reflects positively on our society. 

Fair Debt Collection Definitions

Under the Fair Debt Collection Practices Act, the phrase “debt collector” means a third-party collector. That means that the FDCPA does not apply to everyone.  Specifically, it doesn’t apply to those attempting to collect a personal debt privately created between themselves and another party. Take the example of you borrowing $100,000 from a sibling.  You fail to pay back the loan.  Under those circumstances, the FDCPA regulations don’t apply to your sibling. Rather, “third-party collector” typically refers to a collector working for a collection agency that specializes in debt collection.  This may not always be the case, though.  Under the FDCPA, the collector just has to be a separate third-party entity. 

FDCPA Time Boundaries

The FDCPA states that debt collectors may not contact debtors at times which are inconvenient. This means that collectors are prohibited from calling debtors before 8:00 a.m. and after 9:00 p.m. Collectors are only allowed to contact debtors outside of this window if expressly given permission by the debtor.  

Location Boundaries

The FDCPA also restricts the locations where a debt collector may attempt to contact you. A debt collector may try to contact a debtor at either the debtor’s home or place of employment.  If, however, the debtor specifically requests that the collector desist from contact at work, then the collector must comply. The request to desist may either be either verbal or in writing. If a debt collector doesn’t know the debtor’s direct contact information, the collector may then make additional inquiries.  The collector may contact the debtor’s friends, neighbors, associates or relatives in order to obtain the debtor’s contact information.  The collector, however, may only contact these outside parties one time. What’s more, the collector may not reveal to an outside party any details of the debt itself.  Instead, the collector may only inquire about the debtor’s contact information.

Perhaps the most important aspect of the FDCPA is the way it restricts the manner in which collectors may pursue the debt. When collectors establish contact with a debtor, they may not harass or intimidate debtors.  They most certainly cannot threaten physical harm or police involvement. Moreover, collectors are prohibited from threatening to sue debtors unless they have a serious intent to do so.  If they do intend to take the debtor to court, then such communication may be permissible.  The point is that they may not make idle threats of legal action. 

Consequences of Violating the FDCPA

Debt collectors who violate the provisions of the FDCPA can face serious consequences. If a debtor can prove that a given collector has failed to comply with a certain fair debt collection provision, the debtor can bring a suit against the collector (or his agency through respondeat superior) within one year of the offending behavior taking place. The debtor would be able to sue the collector for both damages and attorney’s fees. Violating the FDCPA can therefore be a very costly mistake and collectors should be sure to studiously observe the provisions of the Act.  

These are just some of the basics of the Fair Debt Collection Practices Act. In the future, we may come back and look at some specific examples of when the FDCPA has been violated and the consequences that followed. We most certainly will continue to tackle issues surrounding debt and debt resolution well into the future, as debt resolution is one of our main areas of focus here at Mackay, Caswell & Callahan, P.C. If you have a debt resolution case, or any other tax issue for that matter, call our tax attorney in NYC so that we can take a look at your unique situation today. 

Image credit: speedpropertybuyers.co.uk