Texas state debt collection laws

Each year, thousands of complaints regarding abusive collection practices by creditors and/or collection agencies get registered with the Office of Consumer Credit Commissioner (OOCC). Instances of prohibited debt collection practices include excessive phone calls to debtors, misrepresentation of facts to third parties, threat of arrest, and wage garnishment.

This can happen to anyone. If you fall behind on your monthly credit card or mortgage payments due to a job loss or some other unfortunate situations, you may find collection agencies turning your life into hell. However, the good news is, Texas debt collection law provides you with some protections against creditors or debt collection companies trying to collect the money that you may owe.

Protections under the law

In the state of Texas, the activities of debt collectors are regulated by the Texas Debt Collection Act. This act strictly prohibits the use of deceptive and abusive collection practices by individuals or corporations to acquire payment on outstanding debts from debtors.

It is illegal for a debt collector to try to collect more than the amount that was agreed upon in the original agreement. However, a debt collector may ask for additional fees like attorney fees, investigation fees, service fees, collection fees or other charges if the actual written contract authorizes additional charges.

If you want to dispute an item in the list with the debt collector, you must send the debt collector a written notice by certified mail return receipt requested. A debt collector is not bound by the law to cease collection efforts if you just tell about the disputed item over phone. The debt collector has 30 days after receiving the dispute letter to prove the validity of the disputed item.

If the item is inaccurate, it must be corrected. The collector, moreover, must notify anyone who has received a report regarding the erroneous item. If the debt collector fails to determine whether or not the item is correct or not, he/ she must declare the item as erroneous and must notify anyone who has received any notification for the erroneous item. However, if the disputed item is found correct, the debt collector may continue with the collection procedures.

Prohibited acts

Texas state debt collection law prohibits some abusive collection practices by the debt collection agencies. As per the law, it is illegal for any collection representative to:

  • Make use of any kind of threat or criminal act
  • Falsely accuse the debtor of fraud or other crimes
  • Make false threats of arrest, repossession of property or seizure of other assets without court orders
  • Harass a debtor by making repeated phone calls at home or in office
  • Make collection calls without disclosing the purpose and identity of the caller
  • Make use of a false identification for collection procedures
  • Misrepresent the actual outstanding balance or its judicial status
  • Not mentioning the name of the original creditor
  • Send any correspondence that resembles to a paper from court or other govt. agency

Penalties for Violations

Individuals or corporations liable for the violation of the Texas Debt Collection Act are subject to civil and criminal prosecutions. If a debtor has been harassed or somehow betrayed by a collection agency, he/she can report the violations and claim damages.

The above mentioned prohibited acts are also violations of the Texas Deceptive Trade Practices/ Consumer Protection Act, and the state attorney general is authorized to take necessary action in the public interest.

Any complaint against any OCCC licensed lender can be registered either by making a call at the Consumer Assistance Hotline at 800.538.1579 or by filing out a complaint form and send it to this agency.

However, if you have any grievance against any professional agency or any third-party debt collector, you may reach out to the Texas Attorney General's Consumer Protection cell to lodge a complaint.


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