An Introduction to the Fair Debt Collection Practices Act

By Allison Martin Last updated Jan 15, 2020

Are debt collectors wearing you down with the constant letters, calls, and texts? If their actions are borderline intrusive, it may be possible that they’re violating your rights under the Fair Debt Collection Practices Act (FDCPA).

But what is the FDCPA, how does it work, and how does it protect you when dealing with debt collectors? Keep reading to learn the answer to these questions and much more.

What is the Fair Debt Collection Practices Act?

Enacted by the federal government in 1978, the FDCPA regulates how debt collectors interact with consumers to collect on delinquent debts.

The rules set forth in the FDCPA are only applicable to personal unsecured and secured debts. These include personal loans, credit cards, mortgages, auto loans, and student loans. However, consumer protections do not extend to business debts.

Under the FDCPA, debt collectors are also given the ability to use legal channels to recoup the funds owed by debtors. And some instances, they may file a lawsuit to collect what they owe, obtain a judgment, or get a court order to garnish your wages from your paycheck. (Please note that federal benefits typically aren’t eligible for wage garnishments that are related to consumer debts).

What Are Your Rights Under the Fair Debt Collection Practices Act?

As a debtor, you are afforded many rights under the FDCPA when dealing with collection agencies. For starters, you have the right to receive a written verification of any debt you allegedly owe from the debt collector before you commence payment.

The debt collector must also send you a written notice that details key information about the debt, including the creditor’s name, the amount you owe, and instructions on how to move forward if the debt doesn’t belong to you. This should be done within five days of initial contact.

If you decide to start making payments towards the debt, you have the right to choose how those funds will be allocated. This is applicable in those situations where the debt collector is pursuing payment for more than one account.

And if you’re overwhelmed by debt and are seeking legal counsel or considering bankruptcy, you have the right to draft up a Cease and Desist Letter to halt all contact from the debt collection agency. You should send this document using certified mail and purchase a return receipt to ensure they receive it. At that point, the only further contact they can make is to notify you of their next intended course of action.

What Are Debt Collectors Prohibited From Doing Under the Fair Debt Collection Practices Act?

Debt collectors can’t just get fed up with you and call demanding that you pay up. They have to be respectful with their approach and refrain from threatening, harassing, or swearing at you. There are also some other actions that are prohibited from taking when attempting to collect a debt, including:

Attempting to collect on a debt without sending a validation notice in writing within five days of initiating contact with you.
Refusing to respond to your debt validation request but moving forward with collection efforts.
Demanding that you pay more than you actually owe. Some collection agencies tack on miscellaneous fees and penalties to the outstanding balance, but doing so is illegal under the FDCPA.
Contacting you before 8 am or after 9 pm. If they call you in the wee hours of the morning or late at night, they are in direct violation of the FDCPA.
Calling you on your job if calls from debt collectors are prohibited. That’s unless you give them permission to do so, and they must still only call within the allotted window of time as allowed by the federal law.
Sharing details about your debt with others, with the exception of your spouse or parents if you are a minor.
Using deceptive tactics, profanity or threatening you on the phone.
Ignoring Cease and Desist Letters that demand all contact be stopped right away. If they continue to call, send text messages, or email you, they are violating your rights. (As noted earlier, they can contact you one more time after receiving the letter to let you know what they plan to do next).
Reporting incorrect information regarding the debt to the credit bureaus. Debt collectors are required to report accurately and timely information.

How Do You Report Debt Collectors That Violate Your Rights?

Despite the potential negative consequences that collection agencies can face for violating the FDCPA, some are willing to test their luck.

You can use the following channels to report debt collectors that violate your rights:

The Consumer Financial Protection Bureau
The Federal Trade Commission
The State Attorney General’s office (in your state of residence)
The court of law (by filing a lawsuit)

Debt collection agencies found to be in violation of the FDCPA can face monetary fines. And should you decide to file a lawsuit in federal court and the judge rules in your favor, you could receive damages if the suit is filed within a one-year window of the original violation. But if you’re unable to prove that you incurred damages as a result of the violation, you could receive up to $1,000 in additional funds to reimburse you for applicable court cost and attorney fees.

The Bottom Line

By understanding the FDCPA, you’ll be better suited to deal with debt collectors and understand when your rights have been violated. But if you are uncertain, it doesn’t hurt to seek legal assistance to gain the clarity you need.