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Fair Debt Collection Practices Act

by Ryan Guina

Debt can be a wonderful tool when used properly. For example, not many people can afford to buy a house with cash, or pay for college with cash while they are attending classes. Loans make it easier to afford these large ticket items, and still be able to live comfortably. But you needs to be careful not to bite off more than you can chew.

When you receive products or services on “borrowed” money you are obligated to repay that money according to the terms of your agreement. Unfortunately there are any number of situations that may arise making it difficult if not impossible to repay your debt as agreed. When this occurs, you may feel as if you have no recourse and are subject to whatever collection actions taken against you as the creditor attempts to collect on their debt. While it is true that creditors have the legal right to recoup money owed on delinquent accounts, there is a limit to what actions can be taken against you, the debtor. More specifically, debts that have been sold or are being collected by a third party collection must fall within the bounds of the Fair Debt Collection Practices Act.

Consumer Protections Under the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) prohibits the use of unfair, abusive and deceptive practices by debt collectors. Enforced by the Federal Trade Commission, the FDCPA offers rights to the debtor when confronted with aggressive third party debt collectors. Here we take a closer at what debt collectors can and cannot do when attempting to collect a debt (find more at the FDCPA FAQ page).

Debt collectors are not allowed to:

  • Discuss the debt with anyone besides the debtor and an attorney representing the debtor. This includes family members, friends and employers.
  • Contact the debtor at their place of employment after they have been notified that this type of communication is not allowed.
  • Harass the debtor at inconvenient times (prior to 8AM or after 9PM) unless the debtor agrees to other times.
  • Continue to attempt to collect a debt without sending a written “validation notice” which explains how much money is owed, to whom the debt is owed, and how to proceed if you feel you are not responsible for the debt. This notice must be sent to you within five days after the first contact is made regarding the debt.
  • Misrepresent themselves as anyone other than a debt collector.
  • Threaten actions that will not actually happen, for example a debt collector cannot claim they will seize property or wages unless they are actually going to initiate legal actions to do so.
  • Threaten violence or harm or use profane and obscene language.

Debt collectors are able to:

  • Contact your employer to verify employment and earnings.
  • Demand full payment of any debts owed; debt collectors are not obligated to agree to payment plans or settle for less than the amount owed.
  • Contact you regarding a debt owed, as long as they do so in a manner that falls within the FDCPA. There is a statute of limitations on certain debts, however that does not mean collection actions have to cease after that period has passed, rather that you have a legal defense if you are sued for the repayment of that debt once the SOL have passed.

If you feel your rights have been violated by a debt collector, document the actions of the debt collector and report these actions to the Federal Trade Commission as well as your State Attorney General’s Office.

If you are in trouble with debt

If you find yourself having trouble making payments and meeting your obligations, you should take a hard look at your finances and look for ways to improve your overall financial health. Here are some tips you may find will help you get your finances back in order:


Published or updated July 12, 2010.
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