Fair Debt Collection

Fair Debt Collection

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 brochure provides answers to commonly asked

questions to help you understand 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 may 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. Another exception is that

the agency may notify you if the debt collector or the creditor

intends to take some specific action.

May a debt collector contact any person other than you

concerning 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 is not permitted to tell anyone other

than you and your attorney that you owe money.

What is the debt collector required to 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 any person. For example, debt collectors may not:

I use threats of violence or harm against the person, property, or

reputation

I publish a list of consumers who refuse to pay their debts (except to a

credit bureau)

I use obscene or profane language

I repeatedly use the telephone to annoy someone

I telephone people without identifying themselves

I advertise your debt.

False statements. Debt collectors may not use any false statements

when collecting a debt. For example, debt collectors may not:

I falsely imply that they are attorneys or government representatives;

I falsely imply that you have committed a crime;

I falsely represent that they operate or work for a credit bureau;

I misrepresent the amount of your debt;

I misrepresent the involvement of an attorney in collecting a debt;

I indicate that papers being sent to you are legal forms when

they are not;

I indicate that papers being sent to you are not legal forms

when they are.

Debt collectors also may not state that:

I you will be arrested if you do not pay your debt;

I 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;

I 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:

I give false credit information about you to anyone;

I send you anything that looks like an official document from

a court or government agency when it is not;

I use a false name.

Unfair practices. Debt collectors may not engage in unfair

practices in attempting to collect a debt. For example,

collectors may not:

I collect any amount greater than your debt, unless allowed by law;

I deposit a post-dated check prematurely;

I make you accept collect calls or pay for telegrams;

I take or threaten to take your property unless this can be

done legally;

I 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

collector's net worth, whichever is less.

Where can you report a debt collector for an alleged violation

of the law?

Report any problems you have with a debt collector to your

state Attorney General's office and the Federal Trade

Commission. Many states also have their own debt collection

laws and your Attorney General's 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.