Fair Debt Collection
Federal
Trade Commission,
August
1996
If you use credit cards, owe money on a personal loan, or are
paying on a home mortgage, you are a "debtor." If you fall behind
in repaying your creditors, or an error is made on your accounts, you may
be contacted by a "debt collector."
You should know that in either situation, the Fair Debt Collection Practices
Act requires that debt collectors treat you fairly by prohibiting certain
methods of debt collection. Of course, the law does not forgive any legitimate
debt you owe.
This article answers some frequently asked questions about your rights
under the Fair Debt Collection Practices Act.
What debts are
covered?
Personal, family, and household debts are covered under the Act. This
includes money owed for the purchase of an automobile, for medical care,
or for charge accounts.
Who is a debt
collector?
A debt collector is any person, other than the creditor, who regularly
collects debts owed to others. Under a 1986 amendment to the Fair Debt
Collection Practices Act, this includes attorneys who collect debts on
a regular basis.
How may a debt collector contact you?
A collector may contact you in person, by mail, telephone, telegram,
or Fax. However, a debt collector may not contact you at unreasonable
times or places, such as before 8 a.m. or after 9 p.m., unless you agree.
A debt collector also may not contact you at work if the collector knows
that your employer disapproves.
Can you stop a debt collector from contacting you?
You can stop a collector from contacting you by writing a letter to the
collection agency telling them to stop. Once the agency receives your
letter, they may not contact you again except to say there will be no
further contact. The agency may notify you if the debt collector or the
creditor intends to take some specific action.
May a debt collector
contact anyone else about your debt?
If you have an attorney, the debt collector may not contact anyone other
than your attorney. If you do not have an attorney, a collector may contact
other people, but only to find out where you live and work. Collectors
usually are prohibited from contacting such permissible third parties
more than once. In most cases, the collector may not tell anyone other
than you and your attorney that you owe money.
What must the
debt collector tell you about the debt?
Within five days after you are first contacted, the collector must send
you a written notice telling you the amount of money you owe; the name
of the creditor to whom you owe the money; and what action to take if
you believe you do not owe the money.
May a debt collector continue to contact you if you believe you do not
owe money?
A collector may not contact you if, within 30 days after you are first
contacted, you send the collection agency a letter stating you do not
owe money. However, a collector can renew collection activities if you
are sent proof of the debt, such as a copy of a bill for the amount owed.
What types of
debt collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress, or abuse anyone.
For example, debt collectors may not: use threats of violence or harm
against the person, property, or reputation; publish a list of consumers
who refuse to pay their debts (except to a credit bureau); use obscene
or profane language; repeatedly use the telephone to annoy someone; telephone
people without identifying themselves; advertise your debt.
False statements. Debt collectors may not use any false statements when
collecting a debt.
For example, debt collectors may not:
- falsely imply that they are attorneys or government representatives;
- falsely imply that you have committed a crime;
- falsely represent that they operate or work for a credit bureau;
- misrepresent the amount of your debt;
- misrepresent the involvement of an attorney in collecting a debt;
- indicate that papers being sent to you are legal forms when they are
not;
- indicate that papers being sent to you are not legal forms when they
are.
Debt collectors also may not state that:
- you will be arrested if you do not pay your debt;
- they will seize, garnish, attach, or sell your property or wages,
unless the collection
- agency or creditor intends to do so, and it is legal to do so;
- actions, such as a lawsuit, will be taken against you, which legally
may not be taken, or which they do not intend to take.
Debt collectors may not:
- give false credit information about you to anyone;
- send you anything that looks like an official document from a court
or government agency when it is not;
- use a false name.
- Unfair practices. Debt collectors may not engage in unfair practices
when they try to collect a debt. For example, collectors may not:
- collect any amount greater than your debt, unless allowed by law;
- deposit a post-dated check prematurely;
- make you accept collect calls or pay for telegrams;
- take or threaten to take your property unless this can be done legally;
- contact you by postcard.
What control
do you have over payment of debts?
If you owe more than one debt, any payment you make must be applied to
the debt you indicate. A debt collector may not apply a payment to any
debt you believe you do not owe.
What can you
do if you believe a debt collector violated the law?
You have the right to sue a collector in a state or federal court within
one year from the date you believe the law was violated. If you win, you
may recover money for the damages you suffered. Court costs and attorney’s
fees also can be recovered. A group of people also may sue a debt collector
and recover money for damages up to $500,000, or one percent of the collectors
net worth, whichever is less.
Where can you
report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney
Generals office and the Federal Trade Commission. Many states have their
own debt collection laws and your Attorney Generals office can help you
determine your rights.
If you have questions about the Fair Debt Collection Practices Act, or
your rights under the Act, write: Correspondence Branch, Federal Trade
Commission, Washington, D.C. 20580. Although the FTC generally cannot
intervene in individual disputes, the information you provide may indicate
a pattern of possible law violations requiring action by the Commission.
To obtain a free copy of Best Sellers -- a list of all the FTC's consumer
and business publications -- contact: Consumer Response Center, Federal
Trade Commission, Washington, D.C. 20580; 202-326-2222. TDD: 202-326-2502.
THE
TEXT ABOVE IS PUBLIC DOMAIN MATERIAL AUTHORED BY AN AGENCY OF THE UNITED
STATES GOVERNMENT AND NOT COPYRIGHTED BY CREDIT GURU. To locate the original
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