What is the FDCPA and how what are your consumer rights under the FDCPA?

The Fair Debt Collection Practices Act (FDCPA) serves as the government’s effort to control the rampant abuse, deceit, and exploitation prevalent in the debt collection sector.

The FDCPA is a federal law that safeguards the rights of consumers when dealing with third-party debt collection agencies. Violations of the FDCPA include harassment, threats, and deceptive information, and debt collectors can face legal consequences if they infringe upon your rights.

Enacted in 1978, the FDCPA notes that aggressive debt collection practices — like repeated calls to a consumer’s home, workplace and friends — can cause bankruptcies, job loss and other detrimental effects on consumers.

If a third-party debt collector violates the FDCPA, a consumer can report the company and file a lawsuit against them. Damages for violating the FDCPA can be up to $1,000 per incident.

Five ways the FDCPA protects consumers

1. Prohibits abusive conduct

The FDCPA prevents third-party debt collectors from engaging in harassing and abusive behavior towards borrowers in order to collect outstanding debts.

This type of conduct extends beyond simply making repeated calls to annoy you. According to the CFPB and FTC, debt collection agencies are not allowed to:

• Use vulgar language
• Continuously call to annoy, abuse, or harass individuals into answering the phone
• Make threats of harm or violence
• Fail to disclose their identity to the consumer
• Provide false information about their identity
• Publicly disclose the names of individuals who have not paid their debts (although this information is reported to credit bureaus) 

2. Restricts when and how often they can contact you

The FDCPA restricts the timing and frequency of contact from debt collectors. Typically, debt collectors are only permitted to contact you between the hours of 8 a.m. and 9 p.m. in your local time, unless you have specified otherwise.

While debt collectors are allowed to call you at your workplace, they must refrain from doing so if you have explicitly stated that they are not permitted to contact you there.

According to the guidelines set by the CFPB, a debt collection agency is considered to have violated the law if they contact you more than seven times within a span of seven days, or if they reach out to you again after having already discussed a specific debt within seven days.

If you require assistance in managing calls from debt collectors, you have the option to hire a lawyer. In the event that your debt collector possesses the contact information of your attorney, the CFPB mandates that the debt collector must communicate with your legal counsel instead of contacting you directly.

3. Forbids unfair practices

 Debt collectors are prohibited from engaging in unfair practices when attempting to collect a debt. They must act transparently and provide accurate information to consumers.

According to the FDCPA, debt collectors are prohibited from engaging in the following unfair practices:

• Demanding post-dated checks as a means of threatening or initiating criminal prosecution.
• Taking or threatening to take your property, unless they have the legal authority to do so.
• Attempting to collect interest or fees that exceed the amount you owe, unless permitted by the contract or state law that governs your debt.
• Depositing a post-dated check before the agreed-upon date. 

4. Bans fraudulent claims

Debt collectors are prohibited from providing false information about their debt collection methods or their identity. They are also not allowed to use deceitful tactics, such as falsely claiming to press criminal charges, in an attempt to collect the debt.

Moreover, they cannot:

• Falsely assert that they are lawyers, government officials, or employees of a credit reporting agency
• Accuse you of a crime and threaten arrest if the debt is not paid
• Misrepresent the amount of debt owed
• Threaten to seize, attach, or sell your assets or wages, unless it is legal and they actually plan to take such action
• Threaten legal proceedings if it is illegal in your state or if they do not intend to follow through
• Send documents that appear official or legal when they are not. 

5. Requires debt verification

Within five days of initially communicating with a borrower, debt collection agencies must verify your debt. They must provide the following information to you in writing:

• How much you owe
• Name of your creditor
• Statement that unless the borrower disputes the debt within 30 days of receiving notice, the debt will be viewed as valid
• Statement that if the borrower disputes the debt, the agency must provide verification of the debt or a copy of the judgment
• Statement that the debt collector must provide the name and address or original credit if it’s different than the current creditor, if the borrower requests it within 30 days

What the FDCPA covers and doesn’t cover

While the FDCPA can be effective in protecting your consumer rights in some ways, it doesn’t cover every aspect of debt.

The FDCPA covers the third-party collection of personal debts including:

• Credit card debt
• Auto loans
• Medical loans and bills
• Student loans
• Mortgages
• Other household debts

The FDCPA, however, does not apply to the following:

• Business debts
• Debt for agricultural purposes

The FDCPA is a powerful consumer protection law that you can use to your benefit to resolve debt issues in a manner that is favorable to you.  Your state may also have its own consumer protection laws that cover debt collector behavior that the FDCPA doesn’t.

The FDCPA allows you to make debt validation requests, which is a strategy you can use very effectively to fight against predatory debt collectors and resolve your debts.

Since this area of the law is highly technical, you should consult a Legal Access Plan lawyer specializing in debt collection to assist you deal with collection efforts.

 What should you do when a debt collector calls?

If you speak to a debt collector, it’s possible to say or do the incorrect thing that could land you in even deeper legal hot water. Therefore, it’s important to know ahead of time what to say and what not to say when speaking to a debt collector

1. Refrain from disclosing information at the beginning.

Prior to initiating any interaction with a debt collection agency, it is crucial to ensure the authenticity of the company and avoid falling victim to fraudulent activities. Refrain from disclosing any personal or financial details until you have verified the caller’s complete name, as well as the company’s name, address, phone number, website, and email address.

Subsequently, conduct thorough research on the company, examine their website, and make contact using their provided phone number.

2. Verify the debt is yours

You don’t have to acknowledge over the phone that you owe the debt. Instead, the CFPB advises you to ask the debt collector to confirm details of the debt and creditor in writing.

Under the Fair Debt Collection Practices Act, five days after you request debt verification, they must send a debt validation letter. The letter will need to include the debt balance, the name of your creditor and a description of your rights under the FDCPA.

3. Respond Quickly

It is important to respond promptly upon receiving a debt validation letter.

First, check the statute of limitations on the debt. If the debt has exceeded the statute of limitations, your creditor may not be able to take legal action against you. The statute of limitations varies depending on the type of debt and the state you reside in. However, it is crucial to note that even if the debt is beyond the statute of limitations, leaving it unpaid can still have negative consequences on your credit and debt collectors may still contact you.

Second, consider negotiating your debt. If your debt is significantly overdue, your creditor might be open to negotiating a debt settlement for an amount less than what you owe. However, it is important to understand that opting for debt settlement can have an impact on your credit report for up to seven years.

Lastly, and importantly, if you no longer wish to communicate with the collection agency, you have the option to send them a cease-and-desist letter. According to the FDCPA, debt collectors are prohibited from contacting you once they receive a cease-and-desist letter, except in specific circumstances. These circumstances include informing you of their intention to pursue legal action, notifying you of their right to take legal action against you, or confirming that they will no longer contact you.

Since this area of the law is highly technical, you should consult a Legal Access Plan lawyer specializing in debt collection to assist you deal with collection efforts.

What Can You Do If a Debt Collector Violates the FDCPA?

Here’s what you can do if a debt collector harasses you or otherwise violates the law when trying to collect a debt from you.

The FDCPA offers consumers protection against overly aggressive debt collection actions by debt collectors and debt collection agencies. If a bill collector has violated federal law, you can take certain steps depending on your goal. These steps range from suing the debt collector to reporting the collector to government agencies to using the violations as a negotiation tactic on the debt.

If a debt collector violates the FDCPA, there are several actions you can take.

Sue the debt collector

One option is to file a lawsuit against the debt collector in state court. In this lawsuit, you will need to provide evidence that the debt collector violated the FDCPA. If successful, you may be entitled to receive $1,000 in statutory damages, and potentially more if you can prove that you suffered harm as a result of the violations.

It is important to note that in these lawsuits, it is common for consumers to be represented by an attorney. The amount of money sought in the lawsuit can include the consumer’s attorney fees and costs. While suing in state court can be a lengthy and time-consuming process, it has the potential to result in the highest monetary damages for the consumer.

It is also important to be aware of the statute of limitations for FDCPA lawsuits. According to the FDCPA, these lawsuits must be filed within one year from the date of the violation. The U.S. Supreme Court clarified in the case of Rotkiske v. Klemm (2019) that the one-year statute of limitations begins to run when the violation occurs, not when it is discovered, unless an equitable doctrine applies.

Suing the creditor in small claims court can be a more convenient option for consumers who prefer not to hire a lawyer or go through the lengthy process of a full state court lawsuit. Small claims courts allow individuals to present their case without legal representation and follow a streamlined procedure. Typically, these courts provide one condensed hearing where the consumer can present their arguments to a judge.

To initiate the case, you usually need to file a simple court document. Hearings are typically scheduled within two months of filing the lawsuit. During the hearing, the judge may deliver an immediate ruling or take the case “under submission” and send the ruling at a later date. However, it’s important to note that small claims courts have a limitation on the amount of damages you can seek.

Report the Debt Collector to the government agencies responsible for enforcing the FDCPA

If you wish to report the actions of the debt collector, you can reach out to the Federal Trade Commission (FTC). The FTC oversees debt collector activities and ensures compliance with the Fair Debt Collection Practices Act (FDCPA). You can submit a complaint online using the FTC’s Complaint Assistant at www.ftccomplaintassistant.gov.

Another option is to contact the Consumer Financial Protection Bureau (CFPB). The CFPB accepts consumer complaints and forwards them to the creditor, working towards a resolution between the consumer and the creditor.

Additionally, if the debt collector’s actions violate state laws in addition to the FDCPA, it may be beneficial to seek guidance from the state Attorney General’s office. They can provide advice on pursuing an FDCPA lawsuit and inform you about any potential state law actions against the debt collector.

Many state Attorney General’s offices also accept complaints against debt collectors. If they receive a sufficient number of complaints against a particular collector, they may take legal action on behalf of the state.

Utilize the Breach as a Tool in Debt Settlement Discussions

In the event that you are in the process of resolving a debt and the collector breaches the FDCPA, you can leverage the violation to reach a settlement. This approach is often effective as collectors are aware that defending against an FDCPA lawsuit can be expensive and may result in an unfavorable judgment.

The amount of leverage you can obtain from the threat of an FDCPA lawsuit depends on the strength of your case. If you possess compelling evidence that substantiates the violation (such as multiple letters, records of numerous phone calls, testimonies from coworkers who also received calls, etc.), you will have significantly more leverage during debt settlement negotiations.

If you have been harassed by a debt collector, consult a Legal Access Plan FDCPA attorney.  They can educate you regarding your rights, guide you through the complex process of exercising your FDCPA rights, get you compensation you may be entitled to and even help discharge to favorably settle the debt that was the cause of the FDCPA violation.