Your Rights Under the Fair Debt Collection Practices Act (“FDCPA”)
Consumers who have fallen behind on paying their bills can often find themselves targeted by aggressive debt collectors who have been hired by their creditors. These situations can be confusing and stressful. There are laws in place to protect consumers – and make sure that they are properly informed during the debt collection process.
The Fair Debt Collection Practices Act (FDCPA) is a federal law that limits the actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity. The FDCPA authorizes several federal agencies—including the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB)—to pursue enforcement actions against debt collectors in particular contexts.
The provisions of the FDCPA are stringent – and intended to protect the public from abusive debt collection tactics. Through the FDCPA, debt collectors are restricted in many ways in how they conduct their collection efforts – ranging from how they communicate to debtors, how many times they contact debtors, when they contact debtors and what they say in their communications with debtors. Debt collectors who violate the FDCPA can be sued by debtors for damages and attorney fees.
One significant thing to know is who is covered by the FDCPA. The FDCPA only applies to third-party debt collectors, such as those who work for a debt collection agency. The actual creditors, however, are not covered by the FDCPA.
It is also important for consumers to know what types of debts are covered by the FDCPA. The FDCPA applies to consumer debt incurred primarily for personal, family, or household purposes. This may include debts such as credit cards, home loans, medical bills, apartment rent, utility bills, car loans, retail financing and student loan debt. This does not, however, include debts that are taken out for business purposes. Thus, if you have a loan in your business’s name, even if you are a personal guarantor, that debt is likely not covered by the FDCPA.
The restrictions applied by the FDCPA are extensive – and may differ between jurisdictions, as some courts apply and interpret the FDCPA differently. There are, however, some basic and general debt collection tactics that are prohibited – and it is important for consumers to understand their rights.
Debt collectors may not harass you. Harassment can take many forms – but some examples of things that debt collectors may not do are threaten you with violence, call you at work (if you instruct them in writing not to), use profanities or abusive language towards you, call you at unusual times or times, or contact you if you have told them to stop calling you.
Debt collectors may not use any “false, deceptive, or misleading representation or means in connection with the collection of any debt.” For example, a debt collector may not misrepresent “the character, amount, or legal status of any debt.”
Debt collectors may not use “unfair or unconscionable means to collect or attempt to collect any debt.” Importantly, a debt collector may not charge any fee or expense to the consumer unless that expense is “expressly authorized by the agreement creating the debt” or otherwise permitted by applicable law.
Protecting Your Rights under the FDCPA
One of the most important tools available to the consumer is the right to respond in writing to a debt collector in order to dispute a debt. If a debt collector contacts you about a debt that you do not owe, that is for the wrong amount, that is for a debt you already paid, or that you want more information about, you should respond in writing to dispute the debt. Just as significantly, within five days after a debt collector first contacts you, the debt collector is required to send you a written notice, called a “validation notice,” that tells the consumer (1) the amount it thinks you owe, (2) the name of the creditor, and (3) how to dispute the debt in writing.
If a debt collector has violated the FDCPA, you may be entitled to not only recover monetary damages, but also attorney’s fees and court costs. You may be able to recover damages if you missed work and lost income, incurred medical bills, or suffered other financial harm as a result of a debt collector’s wrongful misconduct. While this does not affect your ultimate obligation to pay the underlying debt, it may provide you with compensation for damages resulting from violations of the FDCPA. While chances of success are dependent on the evidence, an attorney will help protect the rights of the consumer.
