Overview of FDCPA

OVERVIEW OF FAIR DEBT COLLECTION PRACTICES ACT

The Fair Debt Collection Practices Act is a piece of Federal legislation enacted to curb many of the abusive practices that regularly occur in the collections industry. It establishes guidelines for acceptable debt collector conduct. Some of the major restrictions found in this legislation are outlined below.   

 

WHO IS COVERED BY THE ACT?

The act regulates the conduct of debt collectors, defined as third parties who are regularly engaged in the collection of debt. Therefore, it does not apply to creditors collecting debts on their own behalf such as retail stores that maintain their own in house collections staff. However, in Florida, the conduct of in house collection staffs and other parties not subject to the act is governed by Florida Statute 559 which prohibits essentially the same conduct.
 

WHAT CONDUCT IS PROHIBITED?

  • Making contact with the consumer at times or places which should be known to the debt collector to be inconvenient unless agreed to by the consumer or as authorized by a court. Convenient times are understood to be between 8:00 a.m. and 9:00 p.m.
  • Contacting a consumer directly who is known to the debt collector to be represented by an attorney, unless the attorney fails to respond within a reasonable period of time.
  • Making contact with a consumer at his place of employment if the debt collector knows or should no that such communication is prohibited by the consumers employer
  • Contacting third parties with respect to the consumers debt other than to confirm the consumers whereabouts (without disclosing the purpose as collections) unless the consumer consents or as authorized by a court.
  • Continuing to contact a consumer after a request to cease any further communications other than to confirm its intention to comply with the request or inform the consumer that it will be invoking certain remedies. (* This is often referred to as a “cease and desist letter”. A simple statement identifying the debt and expressing your desire not to be contacted any further is sufficient, but should be sent certified mail to ensure delivery)
  • Threatening the consumer with violence or other criminal means to harm the physical person, reputation or property of any person
  • Using obscene or abusive language toward the consumer
  • Making repeated phone calls to the consumer in order to harass or intimidate
  • Publishing a list of allegedly delinquent consumers to parties other than consumer reporting agencies in an effort to humiliate or embarrass
  • Misrepresenting the communication from a non-attorney debt collector  as coming from an attorney
  • Implying that the debt collector intends to imprison the consumer or seize, garnish or attach property by way of legal process when he is unable to do so. (* A very common example is the debt collector who implies that he intends to garnish wages or place a lien against the consumer’s home when he has yet to obtain a judgment against the consumer and is therefore unable to do so.)
  • Failing to disclose to a consumer that he is being contacted by a debt collector and that any information obtained will be used for that purpose
  • Communicating with a consumer regarding a debt by post card     

Debt collectors tend to purchase a large volume of debt at once with very little screening and it is not at all unusual for debt collectors to attempt the collection of debts that either have been paid, are uncollectible because the statute of limitations has expired or were never lawfully owed. The Fair Debt Collections Practices Act addresses this issue by requiring debt collectors to properly validate debts in the following manner:

Within five days after the initial communication with a consumer a debt collector must send the consumer a written notice containing:

  • The amount of the debt
  • The name of the creditor
  • A statement that the debt will be assumed valid if the consumer does not dispute all or some portion of the debt in writing within 30 days
  • A statement that if the consumer provides written notice to the consumer within 30 days, the debt collector shall obtain verification of the debt or a copy of the judgment and mail it to the consumer
  • A statement that, upon the consumers written request within the 30 day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor

If the consumer notifies the debt collector that he disputes all or a portion of the debt or requests information concerning the name and address of the creditor, the debt collector must discontinue collection efforts until the requested information has been mailed to the consumer.