Definition of the Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act is a federal law that prohibits debt collection agencies from using practices that are considered abusive or misleading. This law was passed by Congress and signed by President Jimmy Carter in 1977. It was a response to unethical debt collection practices, including harassment, abuse, and misleading claims. Prior to the enactment of the Fair Debt Collection Practices Act, there were no laws or procedures to address these harsh practices. Creditors have every right to recover the money owed to them, but the law requires them to use more humane alternatives than some have used in the past.
How the Fair Debt Collection Practices Act Works
Collectors are aware of this law, but some may rely on your lack of knowledge about it. It is not enough to tell them over the phone to stop calling you or that they can reach out to you by email or through your attorney. You must inform them in writing, and the Consumer Financial Protection Bureau (CFPB) provides template letters you can use.
Once you have made your requests known, or if debt collectors have committed any other violations mentioned above, you can take legal action against them. “If the company violates any of the requirements of the Fair Debt Collection Practices Act, you can file a complaint with the Consumer Financial Protection Bureau, or even sue them,” said Leslie Tyne, founder and lead attorney at Tyne Law Group, in a message to The Balance. “Keep a record of all communications with the debt collector, including emails, letters, times of calls, and the name of the person you spoke with at the agency.” And if you don’t believe the debt is accurate, she recommends disputing it.
Exceptions to the Fair Debt Collection Practices Act
However, not all types of debt are covered by the Fair Debt Collection Practices Act, and not all practices are prohibited. For example, the law does not cover business debts. Even if you choose to refuse all communications and opt out of negotiating with the debt collector, they can file a lawsuit against you to recover the debt. If the debt collector obtains a court order, they may garnish your wages and withdraw funds from your bank account.
You should also be wary of fake debt collectors. Never provide personal information such as your Social Security number or bank account number, especially if you are unaware of the debt being requested.
Source: https://www.thebalancemoney.com/fair-debt-collection-practices-act-overview-960562
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