Debt Consolidation - Loans & Credit Card Bill - Debt Consolidation

Debt Collectors Bound by Fair Debt Collection Act

This Act covers what debt collectors may and may not do and your rights as a debtor. 

When you take out a loan or borrow from a credit card company by charging purchases on those cards, you create debt, which makes you a debtor. If you fail to pay that debt in a timely manner, you will become the target of a debt collector. 

Though it is unpleasant to be contacted by debt collectors, they do have a right to try and collect from you what you owe. On the other hand, they must treat you fairly when trying to collect the debt. The Fair Debt Collection Act covers how a debt collector must treat you when attempting to collect the money you owe. The act does not erase the debt, it only dictates what the collectors may and may not do in trying to collect on your debt.

Are all debts covered by this act?
Household, personal, and family debts are addressed by this act. An example of this kind of debt is medical bills, auto loans, or charge accounts. 

Who is considered a debt collector?
A person or firm, other than the original creditor, who regularly collects money owed to creditors.

In what ways may a collector make contact with me?
Collectors may contact you in person, through the mail, with a telegram, or a fax. This contact may only take place at reasonable times or places, usually defined as between the hours of 8 a.m. and after 9 p.m., unless you agree to be contacted at other times. A collector may not contact you at work if the collector knows that your employer disapproves. 

Is there any way to keep a debt collector from contacting me? 
If you write a letter to the collection agency telling them to stop, they may not contact you again except to say that there will be no more contact or to notify you that the collector intends to take some particular action against you.

Can the debt collector contact other people about the money I owe?
If you have an attorney, collectors may contact only your legal representative. If you do not have an attorney, they may contact other people, but only to find out where you live and work, but must not disclose that you owe money.

What information must the collector tell you about the debt?
The collector must give you written notice, within five days of first contacting you, how much money you owe, who you owe it to, and what to do if you don’t think you owe the money.

Can the collector continue to contact me regarding the debt if I do not believe I owe the money? 
If you do not believe you owe the money, you should send a letter to the collection agency within 30 days of being contacted by the collector. In the letter you should explain your position, that you do not believe you owe the money. However, if the collector sends you proof of the debt they may instigate further contact. 

Are debt collectors allowed to harass, or otherwise abuse me?
No, debt collectors may not harass, oppress, or abuse anyone. They may not: 

* use threats of violence or harm against the person, property, or reputation;
* publish a list of consumers who refuse to pay their debts (except to a credit bureau);
* use obscene or profane language;
* repeatedly use the telephone to annoy someone;
* telephone people without identifying themselves;
* advertise your debt. 

False statements. Debt collectors may not use any false 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;
* misrepresent the involvement of an attorney in collecting a debt;
* indicate that papers being sent to you are legal forms when they are not;
* indicate that papers being sent to you are not legal forms when they are. 

Debt collectors are also forbidden to 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;
* actions, such as a lawsuit, will be taken against you, which legally may not be taken, or which they do not intend to take. 

Debt collectors may not: 

* give false credit information about you to anyone;
* send you anything that looks like an official document from a court or government agency when it is not;
* 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 allowed by law;
* deposit a post-dated check prematurely;
* make you accept collect calls or pay for telegrams;
* take or threaten to take your property unless this can be done legally;
* contact you by postcard. 

If I make payment to the debt collector for more than one debt how is the payment allocated? 
Any payment you make must be applied to whichever debts you indicate. The collector may not apply a payment to a debt you do not believe you owe. 

What recourse do I have if I feel the debt collector violated the law?
You can sue the debt collector in federal court within one year from the date you believe they violated the law. If you win, you may recover attorney’s fees and damages. If a group of individuals sue you may recover damages up to $500,000 or one percent of the collectors net worth, whichever is less. 

For more credit related acts, click on the links below:

[ Credit Main | Debt Collection Act | Equal Credit Opportunity | Credit Billing Act | Credit Repair ]
[ Credit Bureau | Credit Reporting ]

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