Debt collectors often have a reputation for being obnoxious, rude, and even scary while trying to get borrowers to pay up. The federal Fair Debt Collection Practices Act (FDCPA)was enacted to curb annoying and abusive behaviors. Even so, some debt collectors flout the law. Here are five tactics that debt collectors are specifically forbidden from using.
Key Takeaways
- Federal law prohibits certain practices by debt collectors.
- Even if you owe money, debt collectors aren't allowed to threaten, harass, or publicly shame you.
- You have the right to order a debt collector to stop contacting you, and they must comply.
- If there's a mistake, and you really don't owe the debt, you can take steps to remedy the error.
Debt collectors generally are legitimately working to try to recoup funds legally owed to a lender. A company may use debt collectors when they have exhausted all other means of getting their money. Being aggressive is part of the nature of this job, but there are legal boundaries on how debt collectors can act.
Here are five practices that a debt collector may not use to try to collect money from you.
1. Pretend to Work for a Government Agency
The FDCPA prohibits debt collectors from pretending to work for any government agency, including law enforcement. They also cannot claim to be working for a consumer reporting agency.
Debt collectors cannot pretend to be a police offer and threaten to arrest or press criminal charges against you if you don't repay their debts. The law forbids them from misrepresenting themselves as working under as working under contract for federal and state government agencies.
2. Threaten to Have You Arrested
Collection agencies cannot falsely claim that you have committed a crime or say you will be arrested if you don't repay the money they say you owe.
First of all, the agencies cannot issue arrest warrants or have you put in jail. Furthermore, failing to repay a credit card debt, mortgage, car loan, or medical bill in a timely manner doesn't land you in prison.
However, if you receive a legitimate order to appear in court on a matter related to a debt and you don't show up, the judge could issue a warrant for your arrest.And, if you fail to pay a court fine related to your debt, or refuse to pay taxes or child support, you could go to jail.
3. Publicly Shame You
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe.
In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
Note
Debt collectors are permitted to contact third parties to try to track you down, but they're only allowed to ask those people for your address, home phone number, and place of employment. In most cases, they may not contact those people more than once.
4. Try to Collect Debt You Don’t Owe
Some debt collectors will knowingly or unknowingly rely on incorrect information to try to get money out of you.
The creditor you originally owed the money to may have sold your debt to a collection agency, which in turn may have sold it to another collection agency. A mistake in the process could result in the collector contacting you with incorrect information.
Or, the agency might be trying to collect a debt from you that has already been discharged in bankruptcy or even one that is owed by someone else with a similar name.
Within five days of first contacting you, a debt collector must send you a written notice stating how much you owe, to whom, and how to make your payment. You might have to prompt them to do this.
If you aren't sure whether you owe a debt, send a letter to the collector via certified mail with a return receipt asking for more information. Be careful not to assume any responsibility for the debt.
The Consumer Financial Protection Bureau provides sample letters to debt collectors that you can use to ensure you don't say the wrong thing or give out more information than necessary.
Note
If you are having difficulty paying your unsecured debt, such as credit card bills or personal loans, you can turn to a reputable debt relief company to help. These companies can negotiate with lenders to lower the total amount you owe. However, you can expect your credit score to decline as a result.
5. Harass You
The law lists specific ways in which debt collectors are not allowed to harass you. They are not permitted to:
- Threaten you with violence or harm
- Use obscene or profane language
- Call you repeatedly
- Call you before 8 a.m. or after 9 p.m. without your permission
- Call you at work, if you forbid it in writing
- Contact you at all if you tell the collector, in writing, to stop contacting you altogether or to contact only your attorney.
Even if you take that last step, there are still some circ*mstances that allow debt collectors to contact you again: They can contact you to let you know they will no longer be contacting you or to tell you that a lawsuit has been filed against you.
If you receive a court summons for a lawsuit regarding your debt, don't ignore it. An unscrupulous debt collector might fabricate such a document, or it might be legitimate.
If you get a summons, look up the court's contact information online (not on the notice you were sent) and contact the court directly to confirm that the notice is accurate. Don't use the address or phone number on the document you receive.
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Exception to The FDCPA Rules
There's an important exception to the FDCPA: In-house debt collectors aren't subject to it. For example, if you are delinquent on your retailer's credit card bill and the retailer calls you directly, it doesn’t have to follow the rules described above.
Most in-house collectors go after debts that are only a few weeks or months delinquent. After that, the original creditor usually hires a collection agency to collect on its behalf or sells your debt to a debt buyer who gets to keep what it collects. In that case, the collectors would be subject to the FDCPA.
How Do You Report a Debt Collector Who Has Violated the Rules?
If you feel a debt collector has violated the rules, contact the Federal Trade Commission suggests contacting it, Consumer Financial Protection Bureau (CFPB), and/or your state attorney general's office. States have different debt collection laws. To determine your rights under your state's law, contact your state's attorney general's office.
Does the Fair Debt Collection Practices Act Apply to Business Debts?
The Fair Debt Collection Practices Act (FDCPA) applies only to debt you have for personal uses, not business debts, according to the Consumer Financial Protection Bureau. It doesn't apply to debt owed for business or agricultural purposes or to corporate debt.
Is There a Statute of Limitations on Debts?
Whether there is a statute of limitations on debts depends on the type of debt and the laws in your state. Where statutes of limitations apply, they are usually between three and six years, according to the Consumer Financial Protection Bureau. However, even after the period has expired, debt collectors can still attempt to collect on the debt by sending you letters or calling you. However, they cannot violate the law while doing so."
The Bottom Line
The Fair Debt Collection Practices Act (FDCPA) lays out specific rules that debt collectors must follow and prohibits certain abusive practices. However, not all debt collectors go by the rules. If a debt collector comes after you, know that you have rights. And if the debt collector violates those rights, you can report them to the authorities and even sue them.
