California state debt collection laws

Table of contents

1. Collection agency harassment

California state laws prohibit debt collectors from collecting or attempting to collect a consumer debt by using obscene or profane language (California Civil Code section 1788.11(a)). According to federal law, a "debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person..." and also prohibits the use of obscene or profane language to the hearer or reader (15 United States Code section 1692d(2)).

Again, a collection agency or its employees must not threaten to do anything that it cannot legally do. It cannot damage your property or physically injure you or others (California Civil Code section 1788.10).

2. Restrictions while calling

The state laws have implemented some restrictions for debt collectors that follow:

  • A debt collection agency may only call between 8 a.m. and 9 p.m. If these hours are inconvenient for you, you may ask the agency to contact you at other times. There is no law that specifically limits the number of calls an agency may make to you, but repeated calls over a short period, which may be annoying or harassing, are prohibited.
  • If you prefer that the agency contact you only by mail, you may ask them to do that. However, make that request by certified mail and keep a copy for your record (California Civil Code section 1788.11(d) & (e)).
  • Keeping in mind the issue of your privacy, collectors cannot make use of postcards while contacting others, and envelopes must not contain information showing that they have been sent by a collection agency (15 United States Code section 1692(b)(4), (5)).
  • When contacting someone other than the person who owes the debt, the collector must give his or her name but not the name of the collection agency (unless specifically asked to give that). When contacting the person who owes the debt, the collector must give either his or her name, or the name of the collection agency.
  • A collector cannot represent himself or herself as anyone except a collector and must tell the person who owes the debt that he or she is trying to collect the debt. (California Civil Code section 1788.13.)

3. Notification regarding collection or transfer of accounts

  • The creditor can refer your account to a collection agency without notifying you. An exception is health spas, which must give you advance notice that the debt is being assigned for collection (California Civil Code section 1812.88).
  • A collection agency must provide with the following information, either while their first contact with you or in writing within five days after the initial contact:
    1. Amount you owe;
    2. Name of the creditor; and
    3. Process to follow if you dispute the bill.
  • Each written notice demanding an outstanding bill payment must contain the following information (15 United States Code section 1692g(a)):
    1. Creditor's name (on the first notice);
    2. Name, address and telephone number of the collection agency;
    3. Date the notice was mailed;
    4. Amount due;
    5. Employer Contact; and
    6. A statement that the debt is assumed valid unless consumer notifies collector within 30 days of receipt of notice that the debt is disputed.
  • The collection agency may contact your employer, but only for the following reasons:
    1. To verify your employment.
    2. To verify your business location.
    3. To garnish your wages once you have been taken to court and a judgment was entered against you; or
    4. To find out whether you have medical insurance to cover a medical bill.
  • In a situation where an agency is legally contacting your employer to verify your employment or business location or to garnish your wages, the agency must make its inquiry in writing. If the agency receives no response to its written communication within 15 days, the agency may contact your employer by other means.
  • A collection agency can contact you at work unless the debt collector knows or has reason to know that your employer prohibits you from receiving such communication. However, if you don't want to be contacted at work, you can request that they not telephone or send you notices at work. However, make your request in writing to protect yourself. If the agency does send you a notice at work, it must be marked PERSONAL AND CONFIDENTIAL. If you request no further contact at work and the agency is unable to contact you at home, the agency may have not another option but to decide to sue you for the amount of the bill it is collecting (15 United States Code section 1692c(a)(3)).
  • You do not have to accept a telephone call from a collection agency unless you agree to it in advance. It is illegal for an agency to misrepresent the purpose of a call in order to trick you into accepting the charges (California Civil Code section 1788.11(c)).
  • If you want to stop all sort of communication from the agency, you may request them not to contact you again. This request MUST be in writing. We suggest that you mail it certified and "return receipt requested" so that you have proof of its delivery. Once the agency receives your letter, its employees can only contact you one final time to explain what action they plan to take. After that, contact must stop. Remember, though, that if you request no further contact in any way, you may leave the agency with no choice but to take you to court (15 United States Code section 1692c(c)).
  • 4. Law regarding postdated checks

    There is no law that can prevent a collection agency from requesting a postdated check; however, a few restrictions may apply.

    • The collection agency is prohibited from soliciting you to provide a postdated check for "purpose of threatening, or instituting criminal prosecution. If you issue a postdated check, write the word "Postdated" above the date on the check (15 United States Code section 1692f (2), (3) & (4)).
    • Similarly, collection agencies cannot use the "Bad Check Law" to recover triple damages for postdated checks that were solicited for the purpose of seeking the statutory penalty provided by California Civil Code section 1719.

    5. If you have paid the bills

    If the bills have already been paid or you do not owe the bills, send the agency a written clarification along with copies of proofs. Send your dispute letter within 30 days after your first contact from the collection agency (15 United States Code section 1692g(a)(4)). Once the agency receives your dispute letter, it must stop further attempts to collect the debt until it sends you written verification to show that you do owe the bill and that the amount of the bill is correct (15 United States Code section 1692g(b)).

    6. Credit reporting

    Collection agencies may report on the bills that they are collecting to credit reporting agencies such as Experian, Equifax, or Trans Union. However, a collection agency cannot threaten to do this unless it is a customer of the reporting agency and actually intends to report your debt (15 United States Code section 1692e (8); California Civil Code section 1788.13(f)).

    7. Interest Charges

    A collection agency can add interest to your bill. However, the terms and rates depend on the circumstances of your particular account. Again, the collection of any amount must be expressly authorized by the agreement creating the debt or as permitted by law.

    8. Legal actions

    A collection agency can sue you in a Superior Court and may not in Small Claims Court.

    9. You can file a complaint

    If your rights have been violated by any debt collection agency, you can file a complaint with the Attorney General's Public Inquiry Unit. They will contact the collection agency and send them a copy of your complaint.

    You can also file a complaint with the Federal Trade Commission (FTC). It’s FTC that enforces the FDCPA and may be contacted by mail at Consumer Response Center, Washington, DC 20580-0001 or telephone at 1(877)-FTC-HELP or Internet at FTC Complaint Assistant.

    Acknowledgement: http://oag.ca.gov/

    How an attorney helps combat collection abuse?

    If a debt collector, a debt collection agency or a debt buyer harasses you during the collection of an unpaid bill, our California attorneys can help you to prevent what immoral is happening to you. We, at Oak View Law Group, understand that in today's economic crisis, it's really very difficult to keep up with your bills, especially when you've lost your job.

    When should you seek the assistance of an attorney?

    As soon as you receive the first harassing phone call or you have been served a lawsuit, contact one of our debt attorneys licensed to practice law in California. If you contact soon, it’d provide the respective attorney to study and strengthen your case. Remember, the more evidence is there, the stronger your case is. Therefore, don’t forget to keep all the messages, voicemails, and letters from the collection agency. If you can manage to prepare these evidences, then we may be able to help you:

    • How much the agency is legally entitled to charge you?
    • Receive financial compensation for the illegal harassment
    • Remove the information from your credit report
    • Offer settlements to lower the debt amounts and eliminate interest charges
    • Have the collection agency pay our legal fees

    A California debt collection attorney can help you fight back abusive debt collection practices and moreover can assist you in the court.


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