Congress created the Fair Debt Collection Practices Act after realizing that abusive collection practices were abundant across the U.S.
In order to govern the collection activities of creditors, the Fair Trade Commission exists and provides guidelines and enforcement against abusive collection activities.
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What Acts Violate Collection Laws?
When a creditor extends credit to a person, the debtor, there is an expectation that the debt will be repaid. When debtors fail to repay, the creditor is afforded the opportunity to collect that debt.
With the expansion of technology and the emersion of privacy rights, society has decided to curb the methods of debt collectors so that consumer debtors can be protected from certain tactics. The following is a list of common abusive debt collection activities that are prohibited by law:
- Invasion of Privacy: Debt collectors may contact third parties only if they have difficulty finding the debtor. When making a call they must identify themselves but not inform the third party of the debt they are after. They must limit their contact to location information only and not reveal the debtor’s financial situation. Additionally, they may not use postcards or envelopes that may disclose to any mailhandler the nature of the contact.
- Harassment or Abuse: When making contact with the debtor, the collector may not intimidate or threaten the debtor including threats to take the debtor’s property when the collector has no legal authority to do so. They may not publish their debt to the public. They may not hide their identity when contacting the debtor. They may not make continuous or repeated calls for the purpose of annoying, harassing, or abusing the person on the other line. They may only call between 8am and 9pm in your local time zone.
- False or Misleading Representations: Debt collectors may not tell the debtor any false claim regarding their identity or association with a government agency, licensed attorney, consumer agency, or some other business. This includes mailings that appear like an official court document or some other false authority. Debt collectors may not falsely inform the debtor that they are committing a crime, will be arrested, or any other false consequence for failing to pay the debt. Debt collectors may not falsely tell the debtor that some negative action will happen to them when such action is not a legally available remedy to the collector or they have no intention of pursuing such a remedy.
- Unfair Practices: Debt collection may not take fees or interest that was not part of the original contract or is not officially awarded by a Court. Collectors causing communication charges to the person by hiding their identity such as additional text or telephone charges.
What Remedies are Available When Collection Laws are Violated?
A debtor may sue for claims such as libel, harassment, or fraud depending on the nature of the collector’s actions and the damage their actions caused to the debtor. The Federal Trade Commission may be able to investigate an abusive practice and bring their own claims in Court.
Should I Contact a Lawyer?
When a debtor retains an attorney, collectors may no longer contact the debtor directly, they must go through the attorney. A local bankruptcy and finances lawyer may be helpful in determining whether a lawsuit will be viable against an abusive collector and can assert your rights during the collection process.