The Fair Debt Collection Practices Act states that federal law prohibits a collection agency from engaging in various deceptive or illegal debt collection practices such as threatening the debtor, etc. In this article, we go over some debt collection practices that are banned by the FDCPA and any collection agency that employs such tactics is looking for trouble!
i) Communication with Third Parties
In most cases, a debt collection agency cannot contact third parties about debts that you owe. There are a few exceptions to this rule such as:
Your attorney – The debt collector can contact your attorney if he knows that you are represented by one. This means the debt collector must always contact that debt attorney and should not phone you, unless you give them permission to contact you or if your attorney does NOT respond to the debt collector’s messages.
Credit reporting agency – Most creditors will file a note to the 3 major Credit Bureaus including Experian, Equifax and TransUnion about your debt and they are legally allowed to do this.
Original creditor – Since most debts are sold to collection agencies by creditors, the agencies are allowed to maintain communication with the original creditors in order to facilitate the collection of the debts.
Debt collectors are permitted to contact your spouse, parents or your co-debtors unless you ask them in writing to stop doing so. If you send a written letter to a debt collector to stop contacting your parents or co-debtors regarding outstanding debts and if they still do, then they would be violating the rules set out by the Fair Debt Collection Practices Act (FDCPA).
Another limitation is that debt collectors are permitted to contact third parties for the purpose of finding information about your whereabouts. In any such communication or phone calls, the debt collectors:
– Must state their name and if they are verifying information about your location or whereabouts.
– Are not required to identify their employer unless you ask them.
– Are not required to state that you owe a debt.
– Cannot contact a third party more than once unless if told to by that third party, of if they believe the third party’s earlier response was false, incomplete or
wrong and that the third party has the complete information.
– Cannot communicate with post cards.
– Cannot use any words or letterhead or symbols on the outside of an envelope that indicates they are trying to collect a debt (including any business logos or overheads). This is if it is clear that such a logo would give away the purpose of the letter.
– Cannot call any third parties for location information if they know a debt attorney represents you.
ii) Communication with You
When a debt collector calls you for the first time, he must state the reason of the call, which usually is an attempt to collect a debt and that any information given by you, will be used solely for that purpose. In further communication, the debt collector must tell you his/her name and the collection agency they work for. Here are some rules regarding when a debt collector can call you and when it is not a good time:
– The debt collector cannot contact you at an unusual time or place e.g. calls before 8am or after 9pm.
– The debt collector cannot contact you directly if he knows that you have an attorney representing you.
– The debt collector cannot call you at work because he knows your employer could prohibit such communications during work. If you do get such a call from a debt collector while at work, tell them your employer prohibits such communication at work and that they should not call you at this time (working hours).
iii) Abuse or Harassment
A debt collection agency cannot engage in conduct that is meant to harass abuse or oppress you. More specifically, the collection agency cannot:
– Publish your name as someone who owes debts or doesn’t pay bills in the public (some child support collection agencies may be exempt from this rule).
– List your debt as for sale to the public or investors’ community
– Make telephone calls to you without identifying themselves as debt collectors
– Call you repeatedly
– Use or threaten to use violence against you
– Harm you or threaten to harm you in any way
– Harm someone else or threaten to harm someone else or his/her property
– Use profanity when communicating with you
If you get such a collector that uses profane language, just hang up on the phone and not bother picking up again if they call back.
iv) Lies or Misleading Representations
Collection agencies cannot like to you or make false misleading representations in an effort to get you to pay debts. Some of these include:
– They cannot claim to be a law enforcement agency or suggest that they are connected with the federal, state or local governments trying to collect debt.
– They cannot falsely represent the amount you owe or the percent of commissions they will receive after collecting your debt.
– They cannot claim to be a debt collection attorney or any message they give you is from an attorney.
– They cannot claim that you will be imprisoned or your property will be seized unless the debt collector is really going to sue you possibly forcing you to go to jail or your property being seized.