What Is Fair Debt Collection Practices Act (FDCPA)?

Debt collectors have a history of abusive and misleading behavior. Unsurprisingly, many debtors dread picking up the phone for fear that a harassing, angry debt collector will be on the other end threatening them. We have heard more horror stories than we care to relate.

Fortunately, the US Congress responded to this history of abuse and passed the Fair Debt Collection Practices Act or FDCPA. This federal law places strict limits on debt collectors and gives debtors a right to relief when harassed.

For example, the FDCPA prohibits debt collectors from threatening debtors with arrest or other legal action unless the legal action is underway. Unfair debt collection practices can also include harassing and annoying debtors.

Debt collectors know how to squeeze money out of people, usually by calling and calling at all hours of the day. There is no reason to put up with this behavior anymore. Scott J. Goldstein can protect your rights. For immediate relief, please contact our law firm today.

To Whom Does the Fair Debt Collection Practices Act Apply?

This law is a powerful tool for restraining some of the worst, most abusive behavior. Unfortunately, it doesn’t apply to all debt collectors. You should understand when it applies and when it doesn’t.

Consumers who don’t pay on a debt go into “default.” At this point, many banks, credit card companies, and other lenders will try to collect the debt using their in-house debt collection department. The lender employs these debt collectors and usually makes an initial attempt to get debtors to pay. The FDCPA does not cover these in-house collection departments.

However, at some point, most original lenders will either hire an out-of-house collection agency (third-party debt collectors) or sell the debt to them. They might also use a law firm for debt collection practices. The FDCPA applies to these outside collection agencies.

While the FDCPA can protect consumer rights, it doesn’t cover every type of debt. The FDCPA covers the third-party collection of personal debts. These debts include auto loans, credit card debt, mortgages, student loans, car loans, medical bills, and other household debts. However, the FDCPA doesn’t apply to debt for agricultural purposes, business debts, or collection efforts made by the original creditor.

What Collection Practices Are Prohibited?

The law places certain restraints on debt collectors. Some of the more important include:

No Unfair Calling Times

The law prohibits debt collectors from calling before 8:00 AM or after 9:00 PM. They also must adjust to your schedule, e.g., if you work at night and are asleep most of the morning and early afternoon. If you receive a call within those hours, it is essential to record the date, time, and conversation in case of any violations.

No Harassing Calls or Texts

A debt collector can’t repeatedly contact you in a harassing manner. A call every night is clearly against the law. Likewise, a debt collector can’t call you repeatedly at work. If your debt collector is calling and it’s an issue you don’t want to discuss in the workplace, you can instruct them to stop calling.

No Publicizing You Have a Debt

Debt collectors must protect your privacy. This means they can’t send postcards stating you have a debt or include language on the outside of an envelope to that effect. People might see these materials and realize you are in debt, so the law prevents this from happening.

No Contacting Third Parties

A debt collector can’t speak about your debt to a third party (other than an attorney). For example, collectors can’t talk to your boss or mom about the debt. They can, however, call to find out where you are.

No Contacting You if You Have an Attorney

Once you notify the debt collector you have a lawyer, the debt collector must speak with only your lawyer. They can’t still keep calling or stopping in to visit you. This is one reason to hire a lawyer.

No Misrepresentation

Debt collectors cannot misrepresent who they are. They can’t claim they are attorneys or that they work for a credit reporting company if they don’t. Instead, they must disclose their identity and avoid claiming to be affiliated with the government or a court.

No Lying

Those who collect debts can’t lie about the amount or say someone will commit a crime if they don’t pay their debt.

No Threats

Debt collectors cannot issue threats, like threatening to have you arrested or threatening physical violence. They also can’t use obscene language. These tactics are not only illegal but also highly damaging to a debtor’s mental and emotional well-being.

No Unfair Collection Practices

Debt collectors must follow procedures outlined in the FDCPA. This includes notifying you of your rights within five days after their first communication, identifying themselves as debt collectors, and providing verification if you request it.

What Is Debt Validation?

This is another crucial right created by the FDCPA. The sad reality is that some debt collectors try to collect on debts that aren’t real. Or the collector lacks adequate paperwork to prove what you owe. This is such a problem that many debt collectors try to file lawsuits but ultimately can’t prove a debt is yours.

When a debt collector calls you for the first time, they should tell you the amount of debt, the creditor’s name, and the fact that you have 30 days to dispute the debt. They will also tell you that if you wait longer than 30 days, they will assume the debt is valid. You have 30 days from the date you receive the notice to request validation, sometimes called “verification.”

You can submit your validation request in writing. Although you don’t need precise language, you can use a form letter at the Consumer Financial Protection Bureau’s website. Because many debt collectors buy debts in bulk, they might lack sufficient paperwork. Some will simply disappear after you request verification, and they realize they lack sufficient records.

But, even before debtors start talking to debt collection agencies, verifying these companies are legitimate is essential. For example, overly aggressive or abusive practices can suggest you’re dealing with a scammer. Taking the time to verify that can save debtors from paying debts they don’t owe. Providing personal or financial information before completing the verification is not advisable.

Some steps must be taken quickly if you confirm the debt collection agency is legitimate and receive a debt validation letter. First, it’s essential to check if your debt has surpassed the statute of limitations on debt. If that is the case, a creditor can’t sue you for it.

If the debt has not surpassed the statute of limitations, you may try to negotiate a debt settlement with your creditor.

Can You Stop a Debt Collector from Contacting You?

Yes. The FDCPA states that debt collectors must stop contacting you once you tell them to. You must send a written notice—requesting over the phone isn’t good enough. Ensure your letter includes a specific request for them to stop contacting you.

After you send this notice, a debt collector can contact you only one more time, usually to tell you they are stopping all contact and/or to explain what actions they are taking (such as filing a lawsuit). Although this letter will stop future contact, it doesn’t stop collection activity.

Can You Sue for Violations of the FDCPA?

Yes. If a third-party debt collector violates the law, you can seek the following in a lawsuit:

  • Attorney’s fees. This is a big help. Your lawyer can bring a suit against the debt collector, and you won’t need to pay their fees.
  • Statutory damages. A debt collection agency might need to pay up to $1,000 for each violation. For example, a debt collector who calls 12 times before 8:00 AM could pay up to $12,000.
  • Monetary losses. You might have spent money due to illegal collection efforts. For example, you might have paid a debt you didn’t owe. You can get that money back in a lawsuit.
  • Other losses. Harassing and illegal collection activity can cause emotional distress or lost wages. You should seek compensation for these harms.

Meet with an attorney to review how much compensation you might receive. If you haven’t already requested that a debt collector stop calling, your attorney can also help with that request.

Should You Keep Records of Collection Activity?

Yes! This is particularly helpful if you must convince a judge that a collector is harassing you. We recommend documenting the following:

  • Keep all letters, postcards, and written notices.
  • Write down the dates and times when the collector calls, including the person’s name. Also, summarize the conversation.
  • Document if the collector contacts someone other than you, such as your boss or a family member. Write down the dates and times. Ask this person to summarize the conversation.

Can New Jersey Law Help?

It might. States might have consumer protection laws that cover other aspects of debt collector behavior that the FDCPA doesn’t. Any violation of the FDCPA could also violate New Jersey’s Consumer Fraud Act. A debt collector who made false promises or lied is acting deceptively, which means they are committing consumer fraud. Our legal team considers all possible avenues for holding debt collectors accountable. More compensation might be available under New Jersey law, so we always look at it.

Contact Our Law Firm Today

There is no excuse for debt collector harassment. Collection agencies should know about the FDCPA and have lawyers who can advise them to follow the law. Any harassing conduct at this point is simply abusive and deserves a response.

Scott J. Goldstein is here to help. Our New Jersey bankruptcy attorney is prepared to stand up for our client’s rights to be treated with dignity and respect. For assistance with a debt collection matter or to stop harassment immediately, please call us at 973-221-5272 or send us an online message.

Call the Law Office of Wenarsky & Goldstein

At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.