Laws the Leg-Breakers Don’t Want You to Know About
Gone are the days when debt collectors only hassled the lazy, financially inept, or the completely downtrodden and hopelessly unlucky. More and more consumers are being contacted by debt collectors as part of an attempt to be paid for past due accounts, either for their own debt, debt inherited as a condition of a death in the family, or as a horrible consequence to an identity theft. Whether or not you actually owe the money, the rules are the same. Debt collectors acting as a third-party interest in past-due accounts are bound by the laws of the FDCPA. Learning what they can (and more importantly: CAN’T do) is vital to protecting your rights and preventing undue stress.
The Fair Debt Collection Practices Act , often referred to as the "FDCPA", was passed by Congress in response to abusive conduct by collection agencies. Actions that are considered illegal under the Act include:
- Contacting a third-party not involved with the debt. This means that if your boyfriend’s name is on the debt, they can call him. They cannot, however, contact Aunt Edna. They also cannot call you at work if it has been made known to them that it is a violation of a work policy. Once you tell them that they cannot call you at work anymore, they need to comply.
- Threatening to sue you, throw you in jail, garnish your wages, kill your dog, etc. They can inform you of an actual impending intention to refer your case to an attorney or to report your debt to a credit agency, but not with the intention of getting you to pay. Additionally, they cannot be a potty-mouth by using racial slurs, insults, or profanity to make their point.
- Letting your debt be known to others. All communications from the agency need to be private. Envelopes containing letters should not have any blatant wording of it being from a collection entity. When calling to speak to you at work, they should not inform your boss or anyone else answering the phone that the call is regarding a debt.
- Calling outside of normal hours. Unless you have given explicit permission for 2 a.m phone calls, agencies may not call someone before 8 a.m. and after 9 p.m. regarding debt.
- Pretending to be someone they aren’t. Letters from the agency need to be on agency or creditor letterhead. It is against the law for a notice to come on “attorney” or “court” letterhead, unless it is an actual legal document from them directly.
Other illegal tactics include asking for you to provide checking account numbers or post-dated checks with the intention of prosecuting you if they come back “insufficient” from your bank. They also may not charge interest or collection fees not stated in your original purchase contract or that may be prohibited by state law.
The FDCPA also requires that agencies send a written notice within 5 days of their first contact with you. This notice must include:
- How much money you reportedly owe;
- The name of the creditor to whom the debt is owed;
- That unless you, within thirty days after receipt of the notice, dispute the validity of the debt or any portion thereof, the debt will be assumed valid by the debt collector;
- That if you dispute the debt in full or in part within that thirty day period, the debt collector will obtain verification of the debt and mail it to the consumer (please note that this does not prohibit the agency from continuing with normal proceedings during the 30-day period); and
- That upon your written request within the thirty day period, the debt collector will provide you with the name and address of the original creditor, if different from the current creditor.
A “Mini-Miranda warning” must be included in the notice. This is a statement letting you know that the notice is from a debt collector any information obtained may be used to collect the debt. Every notice or letter from the agency from this point on must also contain the warning.
While there are many reputable, law-abiding collection agencies out there, it is best to make yourself aware of the proper recourse should you encounter a stinker. If you experience any problems with an agency violating the laws of the FDCPA, please contact your state Attorney General’s office. If you are dealing with an out-of-state agency, you may also call the Federal Trade Commission at 1-877-382-4357 (877-FTC-HELP). Being educated is the key to being protected. Know the law, and you can keep an old debt from ruining your life!