What Is the Fair Debt Collection Practices Act?

If you’ve ever had to deal with debt collectors, you know that having debt in collections can easily make you feel powerless. However, the Fair Debt Collection Practices Act (FDCPA) can help correct that imbalance.

So what is the Fair Debt Collection Practices Act? Here’s what you need to know about the FDCPA and how it protects you as a consumer.

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (FDCPA) is a federal law that regulates third-party debt collectors. Third-party debt collectors often purchase charged-off debts for pennies on the dollar. Some are hired by creditors to try to collect past-due debts.

For example, imagine you owe your doctor’s office $500. The doctor’s office (the original creditor) calls you about it repeatedly. They eventually send the bill to collections, and a debt collection agency starts calling you. The FDCPA applies to the debt collection agency, but it doesn’t apply to the doctor’s office.

Why the FDCPA was created

You might wonder: what is FDCPA protection for? Before the FDCPA was passed in 1977, the world of debt collection was like the Wild West. Debt collectors could threaten, intimidate, and lie to consumers to get them to pay debts. Sometimes, they would publish the names of people who owed money to embarrass them into paying.

The FDCPA banned three types of unethical debt collection practices:

1. Abuse (like using threats or foul language)
2. Deception (like pretending to be law enforcement to scare the debtor into paying)
3. Unfair conduct (like adding unauthorized fees or interest)

The Consumer Financial Protection Bureau (CFPB) is the government agency tasked with enforcing the FDCPA. It publishes detailed guidance so courts, consumers, and debt collectors clearly understand what type of conduct is allowed (and what isn’t).

Your rights under the FDCPA

What is the Fair Debt Collection Practices Act for? These are some of the key protections you have under the law:

Protection from harassment

Debt collectors are known for nonstop phone calls. But if it weren’t for the FDCPA, you’d probably hear from them even more. The so-called “7-in7” rule applies to third-party collectors:

• They may not call more than seven times in seven days for any one debt
• If they have a conversation with you about the debt, they can’t call about that debt for another seven days

Collectors are also not allowed to call at unreasonable hours. Unless you tell them another time is better for you, they may not call before 8 a.m. or after 9 p.m.

On a related note, if you order the debt collector to stop contacting you, they must legally comply. However, this does not erase the debt.

The right to dispute

Within five days of their initial contact with you, debt collectors are required to send you a debt validation notice with more information about the debt. You should carefully review that information to look for any inaccuracies.

If you disagree with the debt or believe you don’t owe it, the FDCPA gives you the right to file a dispute. While the debt collector investigates the dispute, it must pause all collection activities.

Protection from threats and deception

Debt collectors are not allowed to threaten any action that they either (1) may not legally take or (2) have no intention of taking. This means that threatening to arrest or physically harm you over a debt is illegal. 

Collectors also may not use deception. This includes impersonating law enforcement officers, lying about the amount of the debt, and even sending letters designed to look like documents from a court.

The right to privacy

With very limited exceptions, debt collectors may not discuss your debt with third parties. They may call friends or family to try to get your contact information, but they may not say anything about the debt.

If you tell a debt collector that you are represented by an attorney, the collector must direct all future communications to the attorney.

What to do if a debt collector violates FCDPA 

If a debt collector violates your rights under the FDCPA, start by documenting everything. Regardless of what you do next, being able to back up your claims can only help your case. From there, you can do one or more of the following:

File a complaint

When you file a complaint about a debt collector who violates the law, the agency you complain to may investigate further. These are three key agencies you may file a complaint with:

• The Consumer Financial Protection Bureau (CFPB)
• The Better Business Bureau (BBB)
• The Federal Trade Commission (FTC) (for fraud-related complaints)
• The office of your state’s attorney general

If you have clear documentation of the violations, you’re more likely to see your complaint resolved.

Consult a lawyer

A lawyer who routinely handles debt collection cases may be able to offer valuable advice and guidance. Working with a lawyer doesn’t have to mean going to court. Some lawyers may be able to use the debt collector’s conduct as leverage to negotiate a fair settlement.

File a lawsuit

Under the FDCPA, consumers have the right to sue debt collectors in civil court. If you can prove that a violation happened, the court may award you up to $1,000 in statutory damages. You may also be compensated for attorney’s fees and any actual losses you suffered because of the debt collector’s conduct.

Conclusion

Building credit can be challenging, especially if you’re learning about it for the first time. When you understand your rights under the FDCPA, you’ll be better equipped to defend yourself against unethical debt collectors.

Kikoff can be your partner on your credit-building journey. When you sign up, you gain access to a credit line you can use to make online purchases. As you pay off those purchases, we report your on-time payments to all three credit bureaus. If you have eligible debts, Kikoff can negotiate favorable settlements on your behalf.

Ready to get started? Open your account with us today!