Prohibited Debt Collection Practices
Fair Debt Collection Practices Act and Consumer Rights.
Oct 22, 2009
The Fair Debt Collection Practices Act was added to the Consumer Protection Act in 1978 and includes strict guidelines governing the practices of Debt Collectors.
In addition to the communication restrictions placed upon Debt Collection Agencies by The Fair Debt Collection Act, there are many more guidelines debt collectors must abide by.
Harassment of Abuse by the Debt Collector
Under the rules of the FDCPA (15 USC 1692e § 806), a debt collector may not engage in harassment, oppression or abuse in connection with the collection of a debt. This includes calling consumers repeatedly or continuously. Threatening to use violence against a debtor or their property, using obscene, profane, or offensive language is also prohibited.
In addition debt collectors are not allowed to publish a list of consumers who owe debts and are only permitted to report such consumers to credit reporting agencies.
False Representation by the Debt Collector
According to federal law, debt collection companies may not use false representation or deceptive means to collect or attempt to collect a debt, including making their communication appear to be from an attorney or court. (FDCPA [15 USC 1692e] § 807)
Unfair Practices
Debt collectors are not permitted to ask a debtor to pay more than they owe or to pay interest, fees, or expenses that are not allowed by law and accepting/depositing post dated checks is strictly limited.
Collection agencies are prohibited from causing charges to consumers for communications by concealment, such as collect telephone calls, telegram fees, or cell phone calls. They are also not allowed to threaten to take property unless they have a right to do so. (FDCPA [15 USC 1692e] § 808)
Validation of Debts
Collection agencies must send the debtor written validation of the debt within five days of the collector’s initial communication as specified in FDCPA [15 USC 1692e] § 809. It must contain the amount of the debt, name of the original creditor and notice of the consumer’s right to dispute the debt within 30 days.
If a consumer notifies the debt collector in writing within the thirty day period of a dispute or request of validation, the debt collector must cease collection efforts until such verification has been mailed to the consumer.
Multiple Debts
Under the guidelines outlined in FDCPA [15 USC 1692e] § 810, if a debtor owes more than one debt the debt collector must distribute and apply any payments as directed by the consumer.
Legal Actions by Debt Collectors
The question of proper jurisdiction is answered in FDCPA [15 USC 1692e] § 811. Debt collectors who bring legal action on a debt secured by real property must file suit in the judicial district where the real property is located. If the debt is not secured by real property, the collection agency must pursue legal action in the judicial district where the initial contract was signed or where the debtor lives.
When a Debtor’s Rights Have Been Violated
What happens if a consumer’s rights under the FDCPA have been violated? The consumer has one year from the date of the violation to file a lawsuit against the debt collector. In addition to the actual damages the consumer has incurred the courts may award of up to $1,000 plus reasonable attorney fees and court costs.
**This should not be understood to be an exhaustive list either of prohibited or required conduct.
*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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