Under the Fair Debt Collection Practices Act (FDCPA), it is illegal for a collection agency’s debt collectors to call a debtor before 8 a.m. or after 9 p.m. in the debtor’s time zone. The FDCPA also forbids collectors from:
- Calling a debtor at work;
- Using obscene or abusive language;
- Making false or misleading statements;
- Adding unauthorized charges to the debt;
- Making threats; for example, a debt collector cannot threaten to report the debt to the police or otherwise suggest that the police can become involved.
Since the FDCPA prohibits collections agencies from engaging in these practices, the act also gives the debtor the right to demand that the collection agency stop contacting them. The only exceptions would then be that the collector can tell the debtor that collection efforts have ended or that the creditor or collection agency is going to file a lawsuit to collect the unpaid debt. Keep in mind that a debtor’s demand that a debt collector stop contacting the debtor must be in writing.
There are other limitations on whom a debt collector may contact in trying to collect a debt. For example, a debt collector may only contact certain people other than the debtor. They are:
- The debtor’s attorney;
- A credit reporting agency (if permitted by local law);
- The creditor;
- The creditor’s attorney;
- The debt collector’s attorney.
This means that a debt collector cannot contact a debtor’s employer or their friends, neighbors and relatives. There is an exception and that is if the debt collector cannot locate a debtor. In that case, the debt collector may ask a third party, e.g. an employer, neighbor, friend or relative, for the debtor’s home address, telephone number, and place of employment.
If the debt collector does make such contacts, they must give their name and must state that they are confirming or correcting information about the debtor’s location. The debt collector may not identify the collection agency or reveal that the debtor owes any money.
What’s more, the debt collector may not contact any third party more than once unless the collector believes that the information from the first contact was wrong or incomplete and that the third party has new and better information that justifies more contact. Or, the debt collector may contact a third party if the third party specifically requests additional contact.
Does the FDCPA Also Apply to Vendors or Merchants?
The Fair Debt Collection Practices Act applies only to debt collectors who work for collection agencies. It does not apply to vendors or merchants themselves. Several states also have laws that bar debt collectors working for a collection agency or for the creditor itself from harassing, abusing, or threatening a debtor or making any false or misleading statements. These state laws, however, usually do not give the debtor the right to demand that the collector stop contacting them.
For example, in California, the state fair debt collection practices law, the Rosenthal Act, defines the term “debt collector” to include:
- The original creditor who lent money to the debtor;
- Collection agencies;
- Anyone who collects consumer debts in the regular course of business; this could apply to sellers of products who try to collect on their own loans and others also;
- Anyone who creates and sells forms, letters, and other material designed for us in debt collection.
So, the California version of the federal FDCPA applies to more types of debt collectors than does the FDCPA itself. This may be true in other states as well. A debtor may want to contact an experienced consumer rights lawyer to find out what the law is in the state where they live.
Is a Form Demand Letter with a Lawyer’s Signature a Legitimate Collection Technique?
Under the FDCPA, a lawyer has to personally review each individual collection case before putting their name on a collection letter. This means that the lawyer cannot simply order that a form letter be sent, sign it and then let the bill collector send it with the lawyer’s signature. A lawyer has to have more significant involvement with the case than simply signing a form letter.
The lawyer must have reviewed a particular debtor’s file before ordering communication with the debtor. If a lawyer violates this provision of the FDCPA, a debtor may be able to sue the lawyer for up to $1,000 in small claims court for violation.
Can a Debt Collector Insist That Payment Be Sent by Express Mail or Wire Transfer?
A debt collector cannot insist that payment be sent by express or priority mail or by wire transfer. These expensive methods of transmitting funds are not required by law. When a debt is over 90 days past due, debt collectors might suggest that the debtor use one of several “urgency payment” options, including:
- Sending money by express, overnight or priority mail when an ordinary envelope with a first class stamp is sufficient;
- Wiring money;
- Putting payments on a credit card.
However, a debtor is not required to agree to any of these options if the debtor does not want to use them. A debtor is obligated only to agree to pay the debt in a reasonable manner.
A debtor may want to send a check by express or priority mail in order to be able to track its progress through the United States Postal Service and to have the added security that the check will reach its destination. But that is the debtor’s choice and not a legal requirement.
Can a Collection Agency Add Interest to My Debt?
A collection agency can only add as much interest to the amount of a debt as is called for in the original agreement that gave rise to the debt. So, for example, if the debtor has failed to make payments as required by a contract for the purchase of some furniture, the debtor can only be charged interest or late fees as called for by the contract of purchase.
State law in the state in which a debtor lives may authorize adding other amounts to an unpaid and overdue debt. If a debtor believes that charges and fees are being added to a debt illegally or unfairly, they may want to contact an experienced consumer contracts lawyer for advice and guidance. An experienced consumer contracts lawyer can review any contracts or purchase agreements that are involved in the situation and tell if interest or fees are being added that are not authorized by law.
Do I Need an Attorney If I Am Being Harassed by Debt Collectors?
Harassment by debt collectors can be very stressful. If you are being contacted by debt collectors in ways you believe are improper, consult with an experienced debt collection lawyer. who knows the legal and illegal debt collection practices in your state. An experienced debt collection lawyer might be able to negotiate a payment plan with a creditor to whom you owe money. They can review any contracts involved and advise you as to how much you are legally required to pay.
You do not have to tolerate harassment from debt collection agencies. If you are being harassed, you should contact a consumer rights lawyer to find out what your rights and obligations are.