Fair Debt Collection – Part I

Updated: Apr 17, 2018

The federal government found there was evidence of abusive and deceptive practices by debt collectors. Legislators believed this contributed to the number of bankruptcies, marital instability, loss of jobs and invasions of personal privacy. To remedy these problems, it passed the Fair Debt Collection Practices Act.

To understand the Act, it is important to understand how the Act defines “debt” and “debt collector.”

“Debt” is defined as an obligation or alleged obligation to pay money related to a personal, family or household transaction. This would include, for example, debts owned on personal credit cards but not credit cards owed by a business. Likewise, a car loan for a car primarily used by a company would not be covered but a car loan for your personal car would be covered. Medical and utility bills are also covered.

A “debt collector” is a person that uses mail or another interstate commerce method to collect debts owed to another. Essentially, the Act refers to collection agencies, attorneys and others who are collecting debts owed to third parties.

The Act does not govern a person who is collecting her own debts, an employee collecting debts owed to his employer or a company that is collecting a debt owed to a sister company that have a common owner. Some people are expressly not included in the definition of “debt collector” such as a process server or a nonprofit agency providing credit counseling services.

Contacts With Third Parties

Generally speaking, a debt collector is not allowed to contact third parties about your debt without your consent. There are some exceptions. For example, a debt collector may discuss the debt with a spouse, a parent if the consumer is a minor, a cosigner on the debt, a guardian or, in the case of a deceased consumer, the administrator or executor of her estate.

One important exception allows debt collectors to contact third parties to obtain your address or telephone number. This exception does not apply if an attorney is representing you concerning the debt. If a debt collector does contact a third party to get location information about you, he must identify himself and state he is confirming or correcting the location information of the consumer. He may not identify his employer unless expressly asked. The debt collector may not state that the consumer owes a debt.

Debt collectors may not communicate by post card or use language or a symbol on the envelope that indicates that it relates to the collection of a debt or identifies the debt collector as being in the debt collection business.

Prohibited Contacts With Consumers

A debt collector may not contact a debtor

1. at any unusual time or place or a time or place known to be inconvenient to the consumer – unless the debt collector is advised otherwise, convenient times are assumed to be between 8:00 am and 9:00 pm;
2. if the creditor knows the consumer is represented by an attorney with respect to the debt unless the attorney fails to respond to a communication within a reasonable period of time or the attorney consents to direct communication with his client;
3. at the consumer’s place of employment if the debt collector knows that the consumer’s employer prohibits the consumer from receiving such communication.

Harassment

A debt collector is not allowed to harass the consumer in connection with the collection of a debt. Among other things, the debt collector may not:

1. Use or threaten violence or other criminal means to harm any person or his reputation or property;
2. Use obscene or profane language
3. Publish a list of consumers that allegedly refuse to pay debts except to a consumer reporting agency
4. Advertise the sale of a debt to coerce payment of the debt
5. Cause a telephone to ring repeatedly or continuously or engaging someone in telephone conversation repeatedly or continuously with the intent to annoy, abuse, or harass anyone at the called number; or
6. Call without identifying herself except as otherwise provided in the Act.