It is important for consumers to know their rights when it comes to debt collection and credit reporting. Attempts to improve credit scores without clear understanding of these rules and regulations are extremely more challenging. For those who are struggling with paying their bills, knowing what debt collectors can and cannot do legally is of utmost importance.
While most debt collectors manage to hold their business to high standards and follow the letter of the law, a few still manage to operate by use of harassment, intimidation, and deception. Being an informed consumer is essential in this day and time.
In 1978 the Fair Debt Collection Practices Act, also known as FDCPA, 15 U.S.C. § 1692 et seq. was added as Title VIII of the Consumer Credit Protection Act. This federal law governs the actions of debt collectors for personal debts and protects consumers from unfair collection practices.
Communication with a Third Party
According to the FDCPA [15 USC 1692e] § 804, a debt collector is limited in the communication they are allowed to have with a third party. A third party is anyone who is not listed as a debtor on the loan they are attempting to collect. Debt collectors may not use postcards to contact debtors. They are not allowed to use any language or symbol on envelopes that indicates the communication is related to the collection of a debt.
When attempting to contact a debtor by telephone, debt collectors must identify themselves but are not allowed to discuss the debt with a third party. They are prohibited from stating the debtor owes a debt and are further prohibited from discussing the debt with a third party unless the debtor has given them specific authorization to do so.
If a person has retained counsel on the matter and notified the debt collector, they may not communicate with any person other than the attorney of record.
Communication Directly with the Debtor
Debt collectors are prohibited from contacting debtors outside the hours of 8:00 a.m. and 9:00 p.m. and from contacting debtors at their place of employment if they have been notified the employer does not allow such calls, according to FDCPA [15 USC 1692e] § 805. Debt collection agencies are also prohibited from contacting debtors at any time or place in which they have been notified as inconvenient for the debtor.
A debt collector must also cease communication if the debtor notifies them in writing of a refusal to pay a debt or if the debtor wishes the collection company to cease communication. Once a cease communication request has been received, the creditor may only advise the debtor of a termination of their efforts to collect the debt of intentions invoke specified remedies to collect the debt, i.e. levy civil action.
Debt collectors may not communicate with third parties without the prior consent of the debtor with the exception of an attorney of record and credit reporting agencies.
In addition to communication the Fair Debt Collection Practices Act contains additional guidelines for creditors. Harrassment, false representation, debt validation, and legal actions are just some of the additional items covered under this consumer protection law. For more information the author recommends reading, Prohibited Debt Collection Practices: Fair Debt Collection Practices Act and Consumer Rights, Consumer Rights Protection: Who Regulates Banks, Creditors and Debt Collection Agencies and Inquiries and Requests for Credit Reports: Permissible Purpose as Defined by the Fair Credit Reporting Act.
*NOTE: The author of this article is not an attorney and does not represent herself as such. The intention of this article is to inform consumers of the rights available under federal law. Each individual's situation is different and local laws vary from state to state. Consumers with specific questions are encouraged to seek counsel from a local competent attorney versed in local and federal consumer protection laws.
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