The Fair Debt Collection Practices Act

I decided to create this article to assist readers in understanding the Fair Debt Collection Practices Act by highlighting the most relevant sections in an easy to understand format.  The purpose of the FDCPA is to protect consumers against abusive collection tactics and create some guidelines of conduct for both creditor and debtor. I’ve read over this Act and pulled out the most relevant statements for my readers (the government’s version is 28 pages long). Before each section or statement I will provide my interpretation and how it may be commonly applied to creditors/debtors. The last section of this article is a condensed version of the FDCPA. To read the Fair Debt Collection Practices act in its Congressional format click here.  Feel free to print this article off and read it to the next collection agency that calls your place of work.  After reading this article, if you have any questions just leave a comment at the end and I’ll do my best to provide an insightful answer.

Near the end of the FDCPA the consequences to collection agencies who fail to adhere to this Act is spelled out in Section 813 Civil Liability.  Section 813 begins by stating “Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of—” then a long list of damages is listed (we’ll get to this at the end). I just want you to be aware that collection agencies who fail to adhere to this Act can be held liable.  Thanks to the FDCPA the debtor has an excellent resource of legal rights at their disposal – now let’s see what those are.

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Let’s get started
The first section that we are interested in is Section 804 Acquisition of location information. I like to call this part ”What procedures can a collection agency use to find out where you are?” If a collector contacts someone other than you, the debtor, they must identify themselves and ask if you live here or if the person knows where you live.  If the person asks, the collector must identify who his employer is (the name of the collection agency).  The collector isn’t allowed to tell the other person on the phone (your mom, friend, co-worker etc, etc..) that you owe any money. After the call, the collector is not to contact this same person again unless the person allows or if the collector believes the person was lying.

The collection agency cannot use a post card to try and obtain payment from a debtor. Also, the collection agency cannot use an envelope that indicates, in any way, that you are being collected on.  If the collection agency learns that you are currently represented by an attorney, and they are provided the attorney’s name and address – they are only allowed to discuss your debt with the attorney.  They can by-pass the attorney only if the law office hasn’t responded to the collection agency’s request for information within a reasonable amount of time  (probably 30 days or less).

804. Acquisition of location information

Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall—

(1) identify himself, state that he is confirming or correcting location information concerning the consumer, and, only if expressly requested, identify his employer;

(2) not state that such consumer owes any debt;

(3) not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information;

(4) not communicate by post card;

(5) not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt; and

(6) after the debt collector knows the consumer is represented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorney’s name and address, not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to the communication from the debt collector.

Now we move onto Section 805 Communication in connection with a debt collection. This section identifies the proper and legal guidelines a collection agency can use in discussing the debt owed (telephone calls). Susie, a Debt Prison reader, had this to say about collection agents contacting her mother; “My mom is elderly and is getting harassing calls daily at her assisted living.” Imagine that!  The following is what the collection agency can and cannot do:

The collector is not to communicate with you at an unusual time or place.  They cannot call you at work (if you request them not to).  They are only allowed to call between the times of 8:00 a.m. and 9:00 p.m..

The collector is not to communicate with anyone other than the debtor (or the debtor’s attorney) in regards to the debt owed. So they shouldn’t be discussing it with your friends or family.

If you write a collection agency and tell them you refuse to pay the debt or to tell them to cease all communication with you – they are only to contact you to let you know they are terminating the collection of this debt, or to inform you that the collector/creditor is seeking a legal course of action against the debtor via a civil court judgment.

805. Communication in connection with debt collection

(a) COMMUNICATION WITH THE CONSUMER GENERALLY.

Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt—

(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o’clock antimeridian and before 9 o’clock postmeridian, local time at the consumer’s location;

(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or

(3) at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.

(b) COMMUNICATION WITH THIRD PARTIES.

Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

(c) CEASING COMMUNICATION.

If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except—

(1) to advise the consumer that the debt collector’s further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy. If such notice from the consumer is made by mail, notification shall be complete upon receipt.

(d) For the purpose of this section, the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator.

Section 806 Harassment or abuse details specific things a collection agency could say or do that would be considered abusive. They cannot use or threaten a debtor with violence or criminal means to collect on a debt. They are not allowed to use profanity. The only way they are allowed to publish your defaulted debt is by reporting it to credit reporting agencies like Equifax or Transunion.  They cannot publicly sell your debt (like in a publication where other people, the general public, could read it).  Calling you so often that you consider it harassing or abusive is not permitted.

806. Harassment or abuse

A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.

(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.

(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)1of this Act.

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

(6) Except as provided in section 804, the placement of telephone calls without meaningful disclosure of the caller’s identity.

Section 807 False or misleading representations must be one of the larger problems concerning collection agencies because it’s one of the two longest sections. Now before we go any further let me give you a quote from a reader’s comments at my “Can you go to jail for not paying your credit card debt” article.  You will see why this section is so important. Deanna states “because yea i just called back and you were right the people that called me were only harassing and scaring me.. ”

The collector cannot tell you that he is an employee of the state or federal government (like a fictitious “Debt Collection Enforcement Team for the State of California”).  They cannot lie about the status, amount, or legal status of the debt (is it past the Statute of Limitations in your state). The collecting agent cannot act as though they are an attorney or the employee of one (unless they really are). They cannot threaten you with arrest, imprisonment, wage garnishment, liens, or civil judgments unless they seriously intend on pursuing a legal course of action via a civil suit (this seems a bit ambiguous to me too – for who can say whether or not they were serious about pursuing a civil judgment). They cannot threaten you with a course of action that would be considered illegal.  They cannot imply that you are committing a crime in regards to the debt owed.

They are not to share/report (or threaten to share/report) any information about you or the debt owed that is false.  Letters or faxes that are misrepresentations are not legal.  This would be like a collection agency sending you a letter about your debt owed, but types up the header of the document to make it look like it’s coming from a law firm. In their initial letter or phone conversation with the debtor, the collector must state that they are “attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector.”

They are not to imply that your debt may be sold to another collection agency if you don’t cooperate. The collector must use the real name of his collection agency. A collector is not allowed to tell you that they are employed by a consumer reporting agency.

807. False or misleading representations

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.

(2) The false representation of— (A)the character, amount, or legal status of any debt; or (B)any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

(6) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to— (A) lose any claim or defense to payment of the debt; or (B) become subject to any practice prohibited by this title.

(7) The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

(9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.

(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.

(12) The false representation or implication that accounts have been turned over to innocent purchasers for value.

(13) The false representation or implication that documents are legal process.

(14) The use of any business, company, or organization name other than the true name of the debt collector’s business, company, or organization.

(15) The false representation or implication that documents are not legal process forms or do not require action by the consumer.

(16) The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 603(f) of this Act.

One of the most important Sections is 809 Validation of debts.  This Section lays down the guidelines for conduct pertaining to the debt validation process. Within 5 days from the first time a collection agency contacts you (phone or mail) you should write a Debt Validation Letter.  In their response to this letter, the collection agency is to provide you with the following:

* The amount of the debt.

* The name of the original creditor (Capital one, Bank of America, Discover, etc, etc..).

* Their response letter should state, that unless you dispute this validation within 30 days, that this debt will be considered valid and collection attempts will commence.  It should also state that if the debtor does in fact dispute the debt, the collection agency will mail you a verification of the debt or a previous judgment from a civil court case.

* If the debtor disputes the debt, the collection agency must halt all collection attempts for 30 days until they can provide a mailed copy of the applicable information:  1. amount of debt and/or 2. original creditor’s name and address and/or 3. verification of debt and/or 4. civil court judgment.

Please understand that failure to ask the collection agency to validate the debt would not be used as an admission that you owe the money – if you later find yourself in civil court over the matter.

809. Validation of debts

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this title may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.

(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

(d) A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication for purposes of subsection (a).

(e) The sending or delivery of any form or notice which does not relate to the collection of a debt and is expressly required by the Internal Revenue Code of 1986, title V of Gramm-Leach-Bliley Act, or any provision of Federal or State law relating to notice of data security breach or privacy, or any regulation prescribed under any such provision of law, shall not be treated as an initial communication in connection with debt collection for purposes of this section.

Section 813 Civil liability  describes the damages that can be collected from collection agencies via a civil trial. If you find yourself a victim to unethical and illegal collection agencies, you may want to pursue a legal course of action against them.  This would involve documenting the various violations outlined in the FDPCA. You would then hire a lawyer to bring these collectors before a judge. The civil liabilities are listed below.

813. Civil liability

(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of—

(1) any actual damage sustained by such person as a result of such failure;

(2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or (B)in the case of a class action, (i) such amount for each named plaintiff as could be recovered under subparagraph (A), and(ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and

(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.

(b) In determining the amount of liability in any action under subsection (a), the court shall consider, among other relevant factors—(1) in any individual action under subsection (a)(2)(A), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intention-al; or (2) in any class action under subsection (a)(2)(B), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt collector, the number of persons adversely affected, and the extent to which the debt collector’s noncompliance was intentional.

(c) A debt collector may not be held liable in any action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

(d) An action to enforce any liability created by this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs.

(e) No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, not with-standing that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

FDCPA in plain english (condensed version)

Prohibited conduct

The Act prohibits certain types of “abusive and deceptive” conduct when attempting to collect debts, including the following:

Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time

Contact after being asked to stop: contacting consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further contact or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted

Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.

Contacting consumers at their place of employment after having been advised in writing that this is not acceptable

Contacting consumer known to be represented by an attorney

Contacting consumer after request for validation: contacting the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer’s written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor’s name and address

Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector’s misrepresentation that he or she is an attorney or law enforcement officer

Publishing the consumer’s name or address on a “bad debt” list

Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law

Threatening arrest or legal action that is either not permitted or not actually contemplated

Abusive or profane language used in the course of communication related to the debt

Contact with third parties: revealing or discussing the nature of debts with third parties (other than the consumer’s spouse or attorney) or threatening such action

Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business 

Reporting false information on a consumer’s credit report or threatening to do so in the process of collection

Further, the FDCPA requires debt collectors to:

Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector, and that information received will be used to effect collection of the debt

Give the name and address of the original creditor (company to which the debt was originally payable) upon the consumer’s written request made within 30 days of receipt of the §1692g validation notice;

Notify the consumer of their right to dispute the debt, in part or in full, with the debt collector. This so-called 30-day “§1692g” validation notice is required to be sent by debt collectors within five days of the initial communication with the consumer, though in 2006 the definition of “initial communication” was amended to exclude “a formal pleading in a civil action” for purposes of triggering the §1692g validation notice,

complicating the matter where the debt collector is an attorney or law firm. The consumer’s receipt of this notice starts the clock running on the 30-day right to demand validation of the debt from the debt collector. 

Provide verification of the debt If a consumer sends a written dispute or request for verification within 30 days of receiving the §1692g validation notice, then the debt collector must either mail the consumer the requested validation information or cease collection efforts altogether. Such asserted disputes must also be reported by the creditor to any credit bureau that reports the debt. Consumers may still dispute a debt verbally or after the thirty-day period has elapsed, but doing so waives the right to compel the debt collector to produce verification of the debt. Verification should include at a minimum the amount owed and the name and address of the original creditor. 

File a lawsuit in a proper venue – a debt collector may file a lawsuit, if at all, only in a place where the consumer lives or signed the contract

This should not be understood to be an exhaustive list either of prohibited or required conduct.

I hope this article helped you get a better grip on what proper collection techniques are considered illegal.  If you have any questions or comments just drop me a line below.  Google pagerank 5.4 as of 7.7.08.

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