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Fair Debt Collection
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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 and prohibits certain methods of debt collection. Of
course, the law does not erase any legitimate debt you owe.
This brochure answers commonly asked
questions about 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 who regularly collects debts owed to
others. 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 inconvenient 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 of such contacts.
Can you stop a debt
collector from contacting you?
You can stop a debt collector from contacting you by writing a letter to
the collector telling them to stop. Once the collector receives your
letter, they may not contact you again except to say there will be no
further contact or to notify you that the debt collector or the creditor
intends to take some specific action. Please note,
however, that sending such a letter to a collector does not make the
debt go away if you actually owe it. You could still be sued by the debt
collector or your original creditor.
May a debt
collector contact anyone else about your debt?
If you have an attorney, the debt collector must contact the attorney,
rather than you. If you do not have an attorney, a collector may contact
other people, but only to find out where you live, what your phone
number is, and where you work. Collectors usually are prohibited from
contacting such third parties more than once. In most cases, the
collector may not tell anyone other than you and your attorney that you
owe money.
What must the debt
collector 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 receive the
written notice, 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 you or any third
parties they contact. For example, debt collectors may not:
- use threats of violence or harm;
- publish a list of consumers who refuse
to pay their debts (except to a credit bureau);
- use obscene or profane language; or
- repeatedly use the telephone to annoy
someone.
False statements.
Debt collectors may not use any false or misleading statements when
collecting a debt. For example, debt collectors may not:
- falsely imply that they are attorneys
or government representatives;
- falsely imply that you have committed
a crime;
- falsely represent that they operate or
work for a credit bureau;
- misrepresent the amount of your debt;
- indicate that papers being sent to you
are legal forms when they are not; or
- indicate that papers being sent to you
are not legal forms when they are.
Debt collectors also may not state that:
- you will be arrested if you do not pay
your debt;
- 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; or
- actions, such as a lawsuit, will be
taken against you, when such action legally may not be taken, or
when they do not intend to take such action.
Debt collectors may not:
- give false credit information about
you to anyone, including a credit bureau;
- send you anything that looks like an
official document from a court or government agency when it is not;
or
- use a false name.
Unfair practices.
Debt collectors may not engage in unfair practices when they try to
collect a debt. For example, collectors may not:
- collect any amount greater than your
debt, unless your state law permits such a charge;
- deposit a post-dated check
prematurely;
- use deception to make you accept
collect calls or pay for telegrams;
- take or threaten to take your property
unless this can be done legally; or
- 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 the law was violated. If you win, you may recover
money for the damages you suffered plus an additional amount up to
$1,000. 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.
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