Hopefully you have never received a call from a debt collector about a delinquent debt. However, the fact is that millions of Americans have delinquent debt and interactions with debt collectors are part of their daily routine. Whether that debt stems from student loans, unpaid medical bills or credit cards, the calls from debt collectors will start coming eventually. Whether you are one of the people currently dealing with these calls or not, it is important that you understand what conduct is prohibited under the Federal Debt Collection Practices Act (“FDCPA”).
The FDCPA was enacted in 1977 to eliminate abusive debt collection practices by debt collectors, to eliminate the competitive advantage of abusive debt collectors and to promote consistent State regulation of debt collectors. The FDCPA is a very technical statute with a myriad of exceptions and lengthy definitions. For the purposes of this post, many of those exceptions will not be addressed in any detail. Rather, this post is intended to provide some basic information about the FDCPA which may help you to understand if your rights are being violated by debt collectors. If you think that may be the case, you should contact an attorney to discuss your matter in further detail.
FDCPA DOES NOT COVER:
It is important to know what type of communications the FDCPA does not cover. Below are two big exceptions to the FDCPA:
- Original Creditors: The FDCPA does not regulate the actions of original creditors. If you have a delinquent credit card with Bank of America, and Bank of America calls you to collect the outstanding balance, those communications are not covered by the FDCPA.
- Commercial Collections: The FDCPA does not regulate commercial collections. If your small business has some unpaid invoices and your supplier is calling to collect the outstanding balance, those communications are not covered by the FDCPA.
GENERALLY PROHIBITED COMMUNICATIONS:
These are more generally applicable rules on debt collector communications that do not reflect the substance of their communications.
- Inconvenient Time: Debt collectors are prohibited from calling consumers at times known to be inconvenient. The FDCPA assumes that anything outside the times of 8:00AM – 9:00PM are inconvenient. If you notify the debt collector that specific times are inconvenient for you to receive phone calls and provide a reason they are prohibited from communicating with you at those times as well.
- Represented by an Attorney: If you are represented by an attorney and inform the debt collector, they are prohibited from communicating directly with you from that point forward unless your attorney gives them consent to do so.
- Third Parties: Debt collectors are prohibited from contacting third parties (i.e. friends, family, employers, etc.) without your prior consent. The small exception here is that debt collectors may communicate with a third party ONE time in order to obtain location information, defined as “place of abode, telephone number and place of employment”.
UNFAIR, DECEPTIVE, or ABUSIVE ACTS or PRACTICES (UDAAP)
These prohibitions relate more to the content of the communications of the debt collector. Under the FDCPA, debt collectors are prohibited from the following, which is not an exhaustive or exclusive list.
- False or Misleading Representations
- Misrepresenting the character, amount or legal status of the debt.
- Stating that the debt collector is an attorney or for an attorney’s office when then do not.
- Misrepresenting that nonpayment of any debt will result in arrest or imprisonment.
- Threatening to take any action that cannot legally be taken OR that is not intended to be taken.
- False implications that consumer has committed a crime.
- Falsely representing that correspondence is coming from any court or agency of the United States or any State.
- The use of any business, company or organization name other than the true name of the debt collector’s business.
- Unfair or Unconscionable Means
- Collection of additional fees not covered by the original agreement or permitted by law.
- Threatening to take any nonjudicial action to repossess property unless there is a present right and intention to do so.
- Depositing or threatening to deposit a postdated check prior to the date on the check.
The entire landscape of debt collections has changed dramatically since the inception of the Consumer Financial Protection Bureau (“CFPB”). The CFPB has a myriad of helpful resources to aid consumers including guides to these consumer protection statutes. The best defense against abusive debt collectors is to be well educated about your rights and their responsibilities.