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Collection Laws

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What Are Collection Laws?

Collections laws are laws that govern collection practices, such as the Federal Trade Commission Act (FTCA) and the Fair Debt Collection Practices Act. Creditors must comply with these laws when they attempt to collect on debts. These laws prohibit creditors from engaging in unfair or misleading practices when collecting a debt.

What Acts Violate Collection Laws? 

  • Frequently repeated phone calls and calling too early or late is against collection law. Calling after 8 a.m. and before 9 p.m. is accepted.
  • Using intimidation, such as violence or abusive language, to collect on a debt.
  • Creditors or collections agents cannot pretend to be someone else such as a law enforcement officer. He must reveal his true identity to you.
  • Sending out notices that look like official court summons or documents. Letters must have the appearance of normal business documents. They cannot give the appearance of being authorized, issued, or approved by a government agency or attorney-at-law.
  • Collection agencies cannot demand any collection fees, attorney fees, court costs, or other expenses, unless it is justly due. An expense is justly due only if it has been set out in your contract with the creditor.
  • A creditor cannot threaten to turn an account over to a collection agency or take legal action unless this is the usual course of business. This kind of action may not be used as a threat.
  • Furnishing information about a debtor without permission, except to individuals and groups with a specific interest, such as credit reporting agencies, banks, and other creditors. A creditor or a collection agency also cannot disclose or threaten to disclose information concerning a debt known to be disputed by the debtor without disclosing that fact.

Possible Remedies

Since there are laws in place prohibiting such actions, these laws often give you grounds to sue a creditor or collections agency in the event that they do violate these laws. If a creditor or collection agency violates collections laws, you could sue for causes of action, such as libel or harassment.

Should I Contact a Lawyer If I Have Collection Issues?

Being hounded by creditors can leave a person feeling overwhelmed and powerless, especially if those creditors have violated any collections laws. A qualified lawyer that deals in finance law will be able to help you assert your rights against vicious creditors.

Photo of page author Kristen Johnson

, LegalMatch Legal Writer

Last Modified: 04-14-2015 01:48 PM PDT

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