Know the debt-collection rules
- By Milt x_Zall
- Oct 26, 2001
If you use credit cards, owe money on a personal loan, or are paying a home
mortgage, you are a "debtor." If you fall behind in repaying your creditors,
or an error is made on your accounts, you may be contacted by a "debt collector."
You should know that in either situation, the Fair Debt Collection Practices
Act requires that debt collectors treat you fairly and prohibits certain
methods of debt collection. Of course, the law does not forgive any legitimate
debt you owe.
Here are answers to some commonly asked questions about your rights
under the Fair Debt Collection Practices Act.
What debts are covered?
Personal, family and household debts are covered by the act. This includes
money owed for the purchase of an automobile, for medical care or for charge
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 you?
A collector may contact you in person, by mail, telephone, telegram
or fax. However, a debt collector may not contact you at unreasonable times
or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt
collector also may not contact you at work if the collector knows that your
Can you stop a debt collector from contacting you?
You can stop a collector from contacting you by writing a letter to
the collection agency telling them to stop. Once the agency receives your
letter, they may not contact you again except to say there will be no further
contact. The agency may notify you if the debt collector or the creditor
intends to take some specific action.
May a debt collector contact anyone else about your debt?
If you have an attorney, the debt collector may not contact anyone other
than your attorney. If you do not have an attorney, a collector may contact
other people, but only to find out where you live and work. Collectors usually
are prohibited from contacting such permissible third parties more than
once. In most cases, the collector may not tell anyone other than you and
your attorney that you owe money.
What must the debt collector tell you about the debt?
Within five days after you are first contacted, the collector must send
you a written notice telling you the amount of money you owe; the name of
the creditor to whom you owe the money; and what action to take if you believe
you do not owe the money.
May a debt collector continue to contact you if you believe you
do not owe money?
A collector may not contact you if, within 30 days after you are first
contacted, you send the collection agency a letter stating you do not owe
money. However, a collector can renew collection activities if you are 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 anyone.
For example, debt collectors may not:
* Use threats of violence or harm against the person, property or 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
* Indicate that papers being sent to you are not legal forms when they
Debt collectors also may not state that:
* You will be arrested if you do not pay your debt.
* They will seize, garnish, attach or sell your property or wages, unless
the collection agency or creditor intends to do so and it is legal to do
* Actions, such as a lawsuit, will be taken against you, which legally
may not be taken, or which they do not intend to take.
Debt collectors also may not:
* Give false credit information about you to anyone.
* Send you 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
when they try to collect a debt. For example, collectors may not:
* Collect any amount greater than your debt, unless allowed by law.
* Deposit a post-dated check prematurely.
* Make you accept collect calls or pay for telegrams.
* Take or threaten to take your property unless this can be done legally.
* Contact you by postcard.
What control do you have over payment of debts?
If you owe more than one debt, any payment you make must be applied
to the debt you indicate. A debt collector may not apply a payment to any
debt you believe you do not owe.
What can you do if you believe a debt collector violated the law?
You have the right to sue a collector in a state or federal court within
one year from the date you believe the law was violated. If you win, you
may recover money for the damages you suffered. Court costs and attorney's
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 collectors
net worth, whichever is less.
Where can you report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state attorney
general's office and the Federal Trade Commission. Many states have their
own debt collection laws, and your attorney general's office can help you
determine your rights.
If you have questions about the Fair Debt Collection Practices Act,
or your rights under the act, write: Correspondence Branch, Federal Trade
Commission, Washington, D.C. 20580.
Although the FTC generally cannot intervene in individual disputes,
the information you provide may indicate a pattern of possible law violations
requiring action by the commission.
To obtain a free copy of Best Sellers a list of all the FTC's consumer
and business publications write Consumer Response Center, Federal Trade
Commission, Washington, D.C. 20580; or call (202) 326-2222.
Zall, Bureaucratus columnist and a retired federal employee, is a freelance
writer based in Silver Spring, Md. He specializes in taxes, investing, business
and government workplace issues. He is a certified internal auditor and
a registered investment adviser. He can be reached at [email protected].