Debt Collection -- Know Your Rights
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If a consumer uses credit cards, owes money on a personal loan, or is
paying on a home mortgage, she is a "debtor." If a consumer falls
behind in repaying her creditors, or an error is made on her accounts, she may
be contacted by a "debt collector." As a business owner you should
know that in either situation the Fair Debt Collection Practices Act requires
that debt collectors treat the consumer fairly by prohibiting certain methods
of debt collection. Of course, the law does not forgive any legitimate debt
the consumer owes. This article provides answers to commonly asked questions
to help you collect debts following the guidelines of the Fair Debt Collection
Practices Act.
What debts are covered? Personal, family, and household debts are
covered under the Act. This includes money owed for the purchase of an
automobile, for medical care, or for charge accounts.
Who is a debt collector? A debt collector is any person, other than
the creditor, who regularly collects debts owed to others. Under a 1986
amendment to the Fair Debt Collection Practices Act, this includes attorneys
who collect debts on a regular basis.
How may a debt collector contact the consumer? A collector may
contact the consumer in person, by mail, telephone, telegram, or FAX. However,
a debt collector may not contact the consumer at unreasonable times or places,
such as before 8 a.m. or after 9 p.m. (the consumers time zone) unless the
consumer agrees. A debt collector also may not contact the consumer at work if
the collector knows that the consumer's employer disapproves.
Can the consumer stop a debt collector from contacting her? A
Consumer may stop a collector from contacting her by writing a letter to the
collection agency telling them to stop. Once the agency receives the
consumer's letter, they may not contact the consumer again except to say there
will be no further contact. Another exception is that the agency may notify
the consumer if the debt collector or the creditor intends to take some
specific action.
May a debt collector contact any person other than the consumer
concerning your debt? If the consumer has an attorney, the debt collector
may not contact anyone other than the consumer's attorney. If the consumer
does not have an attorney, a collector may contact other people, but only to
find out where the consumer lives and works. Collectors usually are prohibited
from contacting such permissible third parties more than once. In most cases,
the collector is not permitted to tell anyone other than the consumer and the
consumer's attorney that the consumer owes money.
What is the debt collector required to tell the consumer about the debt?
Within five days after the consumer is first contacted, the collector must
send the consumer a written notice telling the consumer the amount of money
she owes, the name of the creditor to whom the consumer owes the money, and
what action to take if the consumer believes she does not owe the money.
May a debt collector continue to contact the consumer if the consumer
believes she does not owe money? A collector may not contact the consumer
if, within 30 days after the consumer is first contacted, the consumer sends
the collection agency a letter stating the consumer does not owe money.
However, a collector can renew collection activities if the consumer is sent
proof of the debt, such as a copy of a bill for the amount owed.
What types of debt collection practices are prohibited?
Harassment Debt collectors may not harass, oppress, or abuse any
person. For example, debt collectors may not:
- use threats of violence or harm against the:
- person
- property
- reputation
- publish a list of consumers who refuse to pay their debts (except to
a credit bureau)
- use obscene or profane language
- repeatedly use the telephone to annoy someone
- telephone people without identifying themselves
- advertise your debt
- False statements Debt collectors may not use any false statements when
collecting a debt. For example, debt collectors may not:
- falsely imply that they are attorneys or government representatives
- falsely imply that you have committed a crime
- falsely represent that they operate or work for a credit bureau
- misrepresent the amount of your debt
- misrepresent the involvement of an attorney in collecting a debt
- indicate that papers being sent to you are legal forms when they are
not
- indicate that papers being sent to you are not legal forms when they
are
- Debt collectors also may not state that:
- the consumer will be arrested if she does not pay the debt
- they will seize, garnish, attack, or sell the consumer property or
wages, unless the collection agency or creditor intends to do so, and
it is legal to do so
- actions, such as a lawsuit, will be taken against the consumer,
which legally may not be taken, or which they do not intend to take.
- Debt collectors may not:
- give false credit information about the consumer to anyone
- send the consumer anything that looks like an official document from
a court or government agency when it is not
- use a false name
- Unfair practices Debt collectors may not engage in unfair practices in
attempting to collect a debt. For example, collectors may not:
- collect any amount greater than the consumer's debt, unless allowed
by law
- deposit a post-dated check prematurely
- make the consumer accept collect calls or pay for telegrams
- take or threaten to take the consumer property unless this can be
done legally
- contact the consumer by postcard
What control does the consumer have over payment of debts? If the
consumer owes more than one debt, any payment made must be applied to the debt
the consumer indicates. A debt collector may not apply a payment to any debt
the consumer believes she does not owe.
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