Anyone who uses a credit card, owes money on a personal loan or is paying on a home mortgage is a debtor. Those who fall behind in repaying their creditors or have an error made on their accounts may be contacted by a debt collector.
In either situation, the Fair Debt Collection Practices Act requires that debt collectors treat debtors fairly. The act also prohibits certain methods of debt collection. The following are common questions and answers pertaining to the 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 who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.
How may a debt collector contact you?
A collector may contact you in person, by mail, telephone, telegram or fax. However, a debt collector may not contact a debtor at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless the debtor agrees to it. A debt collector also may not contact a debtor at work if the collector knows that the debtor’s employer disapproves of such contacts.
May a debt collector contact anyone else about your debt?
If a debtor has an attorney, the debt collector must contact the attorney. For those who do not have an attorney, a collector may contact other people, but only to find out where the debtor lives, what the debtor’s phone number is and where the debtor works. In most cases, the collector may not tell anyone other than the debtor and the debtor’s attorney about the debt.
What must the debt collector tell you about the debt?
Within five days after first being contacted, the collector must send a written notice telling the debtor the amount of money owed; the name of the creditor to whom the debt is owed; and what action to take if the debtor believes he or she does not owe the money.
May a debt collector continue to contact a debtor if he or she believes they do not owe money?
A collector may not contact the debtor if he or she sends the collection agency a letter stating that he or she does not owe money within 30 days after the debtor receives the written notice. However, a collector can renew collection activities if the debtor is sent proof of the debt, such as a copy of a bill for the amount in question.
What types of debt collection practices are prohibited?
Debt collectors may not harass, oppress or abuse the debtor or any third parties they contact. For example, debt collectors may not:
• Use threats of violence or harm
• 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
• Use any false or misleading statements when collecting a debt
For example, debt collectors may not:
• Falsely imply that they are attorneys or government representatives
• Falsely imply that the debtor has committed a crime
• Falsely represent that they operate or work for a credit bureau
• Misrepresent the amount of the debt.
Debt collectors also may not:
• State the debtor will be arrested if he or she does not pay their debt
• State they will seize, garnish, attach or sell the debtor’s property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so
• Claim actions, such as a lawsuit, will be taken against the debtor, when such action legally may not be taken, or when they do not intend to take such action
• Give false credit information about the debtor to anyone, including a credit bureau
• Send the debtor anything that looks like an official document from a court or government agency when it is not
Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not:
• Collect any amount greater than the actual debt, unless state law permits such a charge
• Deposit a post-dated check prematurely
• Use deception to make the debtor accept collect calls or pay for telegrams
• Take or threaten to take the debtor’s property unless this can be done legally.
• Contact the debtor by postcard
What can a person do if he or she believes a debt collector violated the law?
The debtor has the right to sue a collector in a state or federal court within one year from the date the law was violated. If the debtor wins, he or she may recover money for the damages suffered plus an additional amount up to $1,000. Court costs and attorney fees also can be recovered.
A group of people also may sue a debt collector and recover money for damages up to $500,000, or 1 percent of the collector’s net worth, whichever is less.
Where can a person report a debt collector for an alleged violation?
Report any problems concerning have with a debt collector to the state attorney general’s office and the Federal Trade Commission. Many states have their own debt-collection laws, and the state attorney general’s office can help determine rights.
Those with questions about debt collector tactics under the Fair Debt Collection Practices Act, visit the Fort Huachuca Legal Assistance Office. Call 533.2009.