If you've ever found yourself behind on bills for any length of time you're probably no stranger to debt collectors. But did you know there are laws that define very clearly what your rights are and what collectors can and cannot do? It's called the FDCPA Guidelines and they outline the Fair Debt Collection Practices Act.
This law is important to both debt collectors and debtors alike as it defines the boundaries of what is considered fair collection of debts and what is not. Armed with this information not only can you stop unfair collection practices but in some cases you can actually turn around and sue the collector for damages when a violation of the FDCPA Guidelines has been perpetrated against you.
While there are plenty of debt collection services and attorneys who legitimately follow the FDCPA Guidelines there are unfortunately small armies of debt collectors who do not. The Fair Trade Commission (FTC) receives more complaints every year for unfair debt collection practices than for any other business.
You know the old saying, "knowledge is power" â€“ it's true. Making sure you understand the FDCPA Guidelines will ensure that you're not taken advantage of and will assist in keeping debt collectors on the straight and narrow.
Make no mistake, if you legitimately owe a debt you can be collected against. Debt collection is not a crime, it's only when collectors resort to practices that violate the FDCPA Guidelines and infringe on the debtors rights that a (possible) violation has occurred â€“ ultimately this will be for the courts to decide.
Â· Which debts are covered under the FDCPA Guidelines? The FDCPA covers personal, family and household debts such as personal loans, credit cards, auto loans, medical bills and mortgages.
Â· Are collectors allowed to contact me at any time or any place? Absolutely not. Debt collectors are not allowed to contact you before 8am nor after 9pm unless you expressly agree to allow them to. In addition, debt collectors may not contact you at work if you have expressly told them (orally or in writing) that you're not allowed to receive calls there.
Â· What can I do to stop debt collectors from contacting me? Under the FDCPA Guidelines to get a collector to stop contacting you, you must tell the collector in writing. Make a copy, keep one for yourself and send one to the collector via certified mail. Once they've received the letter, they may only contact you again to affirm to you they'll be no further contact or to inform you of further action they intend to take against you (such as a lawsuit). Please note this does not alleviate your responsibility to pay any legitimate debts you have nor does this stop the collection process against you.
Â· A collector is calling my family and friends. Can they do that? â€“ Yes, but with limitations. If you are represented by an attorney the collector must contact the attorney. If you're not represented by an attorney, they may contact other people â€“ but only to obtain your address, home phone and where you work. They are also limited to contacting 3rd parties once and they may NOT discuss your debt with anyone other than you, your spouse and your attorney. Doing so violates the FDCPA Guidelines.
Â· Can I require the collector to give me information about the debt? Yes. Every collector must provide you with a written validation notice stating how much you owe within 5 days after they first contact you (upon request). This notice must also contain the name of the creditor with whom you owe the money and what to do if you don't think you owe the debt.
Â· What can I do if I don't think I owe the debt? Send the collector written notification that you don't owe any (or all) of the debt, request verification of the money owed and inform the collector they must stop contacting you. Please note, this must be done within 30 days after you receive validation of the debt. Also be aware, the collector may resume collection activities once they have provided written verification of the debt.
Â· Can a collector garnish my wages? If you are sued and the collector wins in court, a judgment will be entered against you stating the amount you owe and allowing the collector to obtain a garnishment order that would allow a 3rd party (such as your employer or bank) to then turn over funds directly from your pay to satisfy the debt. Wage garnishments are (typically) only possible as the result of a court order so if you receive a lawsuit summons make sure you appear! Failure to appear will most likely result in a default judgment against you.
Â· Is there any type of income that can't be garnished? Yes, under the FDCPA Guidelines the following pay/benefits cannot be garnished:
o Veterans Benefits
o Service Members Pay
o Social Security Benefits
o Supplemental Social Security Benefits
o Civil Service and Federal Retirement and Disability Benefits
o Military Annuities and Survivor's Benefits
o Student Assistance
o Merchant Seamen Wages
o Railroad Retirement Benefits
o Longshoreman's and Harbor Workers' Death and Disability Benefits
o Foreign Service Retirement and Disability Benefits
o Compensation for injury, death or detention of Employee's of US Contractors Outside the US
o Federal Emergency Management Agency Federal Disaster Assistance
Â· What can I do if I think a debt collector has violated the FDCPA Guidelines? You may bring a lawsuit against the collector in state or federal court so long as less than one year has passed since the (alleged) violation. Note that winning a lawsuit against a debt collector under the FDCPA Guidelines does not alleviate the original debt, these are considered two completely separate issues (their violation of the FDCPA Guidelines and you owing the debt).
Â· I think a debt collector has violated the FDCPA Guidelines, who do I report them to? You should report them to both the Attorney General's office (www.naag.org) and the Federal Trade Commission (www.ftc.gov). Note that state laws may vary so contact your states Attorney General to find out what your rights are under state law.
Debtors have a legal obligation to pay their debts and collectors have a legitimate right to take action to collect those debts when the terms of money borrowed have been breached. The practices used to effect collection though are very clearly defined by the FDCPA Guidelines and any deviation from these guidelines is ground for legal action.
While there are many good, law abiding and legitimate collectors out there â€“ the industry is plagued with collectors who use illegal, harassing, deceptive and humiliating techniques to make their collections. When encountered, these individuals and companies should be brought to task and held to the law.
Knowing your rights under the FDCPA Guidelines is your first line of defense in knowing and understanding what your obligations are and what collectors can and cannot do to you under the law.
Some debts may no longer be collectible as their Statue of Limitations has run out (this varies from state to state and varies based on the type of debt). Know the law first and be careful what you say or admit to. Even verbally acknowledging a debt can restart the collection clock and allow collection efforts to resume on aged debt.
If you feel you have been wrongfully collected against educate yourself and take action!