This federal law is enforced by the Federal Trade Commission (FTC), which protects consumers from deceptive, unfair, and abusive debt collection practices. This law only applies to a third-party debt collector, not the original creditor.
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The Fair Debt Collection Practices Act (FDCPA) is Title VIII of the Consumer Credit Protection Act. It came into effect in March 1978 with 3 objectives:
The FDCPA generally applies to consumers and third-party debt collectors. It covers personal debt such as credit card debt, medical bills, student loans, and payday loans. The FDCPA does not cover business and other commercial debts.
As a consumer, the FDCPA grants you rights that protect you from illegal debt collection practices. Read below to know your rights:
Right to information: When a debt collector contacts you for the first time, they must inform you of your right to dispute the debt. The collector must tell you the actual debt amount and the creditor's name; if you do not dispute the debt in 30 days, it will be considered valid. In addition, the collector must send the consumer the debt details in a written notice within five days of the initial telephone contact.
Debt verification: If you have doubts about the debt's validity, you can ask the debt collection agency for written verification within five days. However, you must request it within 30 days of the initial contact with the collector. When you do this, all collection attempts must stop until the debt is verified.
Cease communication letter: If a collector is calling at your place of work or harassing your friends or neighbors, a cease communication letter can be an effective way to stop the harassment. Once you send the letter, a collector may only inform you about specific legal steps they intend to take.
Privacy: The FDCPA protects the privacy of debtors by prohibiting collection agencies from informing anyone other than authorized individuals, such as the debtor's attorney or spouse, about the debt. They are not even permitted to leave details on answering machines.
Protection from harassment: Under the FDCPA, you have the right to protect yourself from any violent or criminal initiative undertaken by collection agencies. The FDCPA further bans profane, obscene, or offensive language.
Payments: If you have multiple accounts, the collection agency has to apply for payments according to your instructions. Plus, they can't apply payments to disputed debts.Back To Index
The Consumer Financial Protection Bureau (CFPB) updated the FDCPA rules in October 2020. These new rules state that debt collection agency can text, email, or contact you on social media platforms like Facebook. They can send you unlimited texts to collect debts. However, they must offer you a way to opt out of such communication. Debt collectors can only call you seven times a week.Back To Index
Debt collectors can contact consumers through email and social media platforms, which was impossible before. They are getting one more option to contact or harass consumers. In that sense, the new FDCPA law is good for debt collectors.
The bad news is that most consumers have multiple debts, so they may get more than seven calls per week since debt collectors can call seven times for each account.Back To Index
An aggressive debt collector's messaging practices can increase the cost of consumers' cell phone bills who do not have an unlimited text message plan.
The law says that consumers must be able to opt out of these communications. Now, there is doubt surrounding how many debt collectors will follow this rule. They may ask consumers to make payments without explaining their rights or providing a means to opt out of burdensome communications.Back To Index
Consumers have three options:
Here are seven ways to find out.
Financial experts and attorneys say that to register a complaint against a debt collector in violation of the FDCPA, you must meet the following four legal requirements:
You must be a consumer.
You have to file a lawsuit within a year.
A recent ruling by the Supreme Court says that the one-year deadline for filing an FDCPA lawsuit starts from when the violation occurred, not when it was discovered.Back To Index
As soon as you get a debt collection letter, reply to it.
A proper collection letter should provide you with the essential information related to your debt. It should include the original creditor's name, how much you owe, the means to make the repayments, and how to dispute any discrepancy.Back To Index
You can sue a harassing debt collector in a state or federal court. If you can prove that debt collectors have engaged in unfair practices, you are eligible to collect $1000 in statutory damages per violation.
You can file a lawsuit without an attorney in the small claims court. If you don't want to hire an attorney, you can bring your case to small claims court. You just need to file a simple court document to file the lawsuit. The process will usually take less than two months to complete. It's a faster, less complicated process, but the downside is that there are limits on how much compensation you can seek in small claims court.
You can file a report with your state's attorney general. A harassed consumer can contact their state's attorney general to report the violation. Some states enforce the FDCPA, or similar laws passed by their state, to protect consumers. So, if the state attorney general gets a violation report against a debt collector multiple times, they might file a suit against the debt collector on behalf of the state.
You can report the matter to the CFPB. The Consumer Financial Protection Bureau (CFPB), also works as a problem solver. If a consumer files a complaint against an original creditor or a collector, this agency tries to solve the problem. You can submit your complaint here.Back To Index
On Sunday, debt collectors may call you between 1 pm and 5 pm. The good news is that the FDCPA prohibits collection agencies from calling you on Sunday at all if you specifically instruct them not to. Likewise, if you tell them not to call you on certain holidays, they must comply. In some states, collection calls during official holidays are strictly prohibited.
If collections agencies call you outside the allowed hours, they violate the FDCPA.Back To Index
Ask the debt collection agency to call you during the week if you genuinely owe a debt.Back To Index
Unfortunately, the FDCPA doesn't give you any protection regarding this matter.Back To Index
The FDCPA doesn't allow the garnishment of federal benefits. However, debt collectors can garnish your federal benefits if you owe alimony, child support, federal tax, or student loans.Back To Index
The FDCPA doesn't allow debt collectors to garnish wages directly. The debt collectors must first win a judgment against the debtor to garnish any wages.Back To Index
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