Fair Debt Collection Practices Act, (FDCPA)

Fair Debt Collection Practices Act, (FDCPA)

Have you ever received threatening calls due to unpaid credit card debts? Well, such calls can be scary, but what most consumers don’t know is that the calls are also illegal. Under the Federal Fair Debt Collection Practices Act (FDCPA), collection agencies are prohibited from threatening, harassing or contacting someone in debt in an inappropriate manner.

Debt collection agencies are not only on the rise, but they also earn billions of dollars from the debts they collect. But as much as this is a good move for the industry, it is never the case for the consumer. In fact, it is believed that threatening debt collection calls are among the causes of emotional distress. Student loans, healthcare related debts, and credit card debts constitute the largest percentage debts collected by the agencies. FDCPA protects consumers against abusive, deceptive or unfair practices from debt collectors.

Taking a closer look at FDCPA

If lenders fail to get their money back, they turn to debt collectors for assistance. The FDCPA rules apply only to the debt collection agencies that were either hired to help in debt collection or bought the debt from a third party company.

The work of debt collection agencies is not only to represent banks, credit card issuers or companies that advance money to consumers. As much as this is part of their work, there are also other debt agencies that buy consumers’ debts once the lender gives up trying to get their money back. In both cases, they have the right to collect the debt, but they also have to follow the rules set down by FDCPA when pursuing payment. If the original creditor does not collect the funds within six months, they can sell the uncollected debt to third parties that then pursue you for payment. FDCPA protects consumers against personal, family or household debts which include medical bills, auto loans, credit card debts, and retail refinancing.

What can debt collectors do, and what are they not allowed to do?

If borrowers are not able to pay their debt, they also have the option of working with a debt management firm or a nonprofit debt collector to agree on a repayment plan. But even if you are a delinquent borrower, you still have the right to respectful treatment. To be specific, it is unlawful for consumers to get collector calls between 9.00 pm and 8.00 am. The caller is also not allowed to threaten violence or use abusive language. Other protection to consumers who are victims of frequent calls from debt collection agencies include;


First, the company has to prove that you owe them money. The claim must be documented and copies of unpaid bills must be attached.


Debt collectors are also prohibited from harassing, abusing or oppressing the consumer by using threatening words or making repeated calls with the intention of annoying the consumer. The collectors are also not allowed to call family members, friends or neighbors unless they need to know your current phone number or address. Coming up with a published list of consumers who don’t pay their debt is also unlawful.

False statement

Additionally, it is against the law for debt collectors to lie so as to collect a debt. This includes identifying themselves falsely as government officials or misinterpreting the total amount of debt owed.

What rules should be followed by debt collection agencies?

One of the ways to stop frequent calls from debt collectors is by notifying them in writing. To some extent, this can be helpful. But remember that if you fail to pay back the debt, creditors will still have the right to sue you, and they may even not contact you when they decide to file a lawsuit. To ensure that you stop the collection calls once and for all, it is advisable to send a cease-and-desist letter to the collection agency. If you hire an attorney to send the letter, the agency will work directly with the attorney and not you. But when talking to a third party, the collection agency should not discuss any information about your debt.  Such information can only be shared by you, your spouse and the attorney.

The collectors are also requested to give details of every debt they are trying to collect. This validation notice should be in written form and includes the following information:

  • The name of the creditor
  • The total amount owed       
  • How the debt should be paid

After the validation notice is sent, the consumer has 30 days to contact the debt collection agency, through a letter, to provide reasons why the amount is incorrect or why you do not owe the money. In some cases, a debtor may owe money to more than one creditor. In this case, the debt collectors may mistakenly change a creditor’s name, although the loan amount will remain the same. Ensure that the collectors are clear about who is the original lender and how much is the outstanding amount.

If you have already paid the debt, ensure that you add a copy of the bank statement or the cancelled check. If you do not agree with the amount you owe, you should also ensure that information on the amount you paid including fee charges and interest rate are included in the verification of the debt.  

The debt can also be a result of identity theft. In this case, a copy of police report should be included. If a consumer fails to respond within the validation period, it will be taken as valid.

How to file a complaint

If you feel that the debt collection agency was unfair or did not follow the debt collection practices act, you can file a complaint through the attorney general’s office, federal consumer financial protection bureau or the Federal Trade Commission, FTC. Since the laws vary in different states, the attorney general’s office is the best place to be aware of what is legal and what is not allowed under the state laws.

What happens after you file a complaint?

If the actions of the debt collection agency led to damages like wage loss, the agency can be ordered to pay for those damages. Even when the consumer is not able to show proof of the damage, the debt collectors can end up paying up to $1,000. If you sue the agency as a group, you can recover amounts up to $500,000. In some cases, you can be rewarded 1% of the total net worth of the agency. You should also ensure to keep record of the text messages, phone calls, letters or voicemails to act as evidence for the case.

But remember that you can also be sued the debt collection agency, in this case, you can either send an attorney to represent you or appear personally in court. Failure to make an appearance can lead to legal action against you and the agency can end up collecting the debt whether they were at fault or not.

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