The federal Fair Debt Collection Practices Act (FDCPA) and the Texas Fair Debt Collection Practices Act (TDCPA) were passed to protect consumers from unfair or abusive debt collectors. The FDCPA and TDCPA mainly cover personal, family and household debts, including credit card debts, personal loans such as mortgages and credit cards, car loans and student loans. They also apply to bounced checks, medical and insurance debts, unpaid utility bills, unpaid condo fees, and outstanding legal judgments.
The FDCPA applies to some, but not to all debt collectors. Debt collectors who are collecting a debt for a creditor are covered by the FDCPA as are attorneys who are hired by creditors to handle consumer collections for them. However, a creditor's in-house debt collectors are not covered by the FDCPA, nor are federal and state government officers who are collecting debts for a government agency. Also, in most instances, non-profit credit counseling organizations are not covered by the FDCPA either. The TDCPA covers both creditors collecting their own debts and Debt collectors collecting debts for others.
The FDCPA provides many important consumer protections that you should know about and that can help protect you when a debt collector violates the law. Therefore, here is some other information that you can use to determine whether or not a debt collector who contacts you about money that you owe is covered by the FDCPA. That law probably applies to the debt collector if:
- The name of the company that the debt collector is employed by and the name of the creditor he is collecting money for are different. According to the FDCPA, the debt collector must tell you who he is collecting the debt for and what company he works for when he contacts you for the first time.
- The debt collector's employer uses the mail or telephone in its business and its business is mainly collecting debts, or it regularly collect debts owed to someone else. (This definition could include collection agencies that buy debts from creditors, attorneys who collect debts for someone else, and in some cases, even check guarantee companies.
- A debt collector can contact you about a debt for years after the debt becomes past due. However, there is a limit on how long a debt collector has the right to sue you in order to collect that debt. Just how long depends on the type of debt that you owe and on your state's statute of limitations. The statute of limitations for a particular type of debt usually begins on the date that you miss your first debt payment (not when the collection agency received the debt), and runs in Texas for four years on a contract debt.
- The FDCPA prohibits debt collectors from doing a wide variety of things when they are trying to collect a debt. For example, the law says that a debt collector cannot:
- Threaten you with violence or use violence in order to get you to pay a debt. This prohibition includes violence to you and to your property.
- Threaten to harm your reputation.
- Use obscene, profane or abusive language when communicating with you. Racial slurs are also prohibited.
- Include your name on a list of debtors and provide that list to any person or business other than a credit reporting agency or some other business or individual authorized to receive consumer credit record information under the federal Fair Credit Reporting Act.
- Call you repeatedly with the intent of annoying, abusing or harassing you. Calling several times a day or a week or calling over and over again within a relatively short period of time-during an afternoon or a morning for example-would probably be viewed as a violation of the FDCPA.
The FDCPA also prohibits a debt collector from using false, deceptive or misleading means to pressure you into paying a debt. For example, a debt collector cannot:
- Threaten you with dire consequences if you don't pay a debt, unless the collector has the means and the legal authority to follow through on the threat and intends to do so. For example, a debt collector cannot threaten to sue you, put you in jail, garnish (or take) your wages without a court order, seize and sell your property repossess your home, put a lien on an asset you own, cause you to lose your job, etc. unless it is a valid legal step for the debt collector to take.
- Send you a letter or a notice that appears to come from an attorney when it does not.
- Put you at a legal disadvantage vis a vis a debt by sending you a notice or legal document related to a debt that you owe then leading you to believe that you do not need to respond to that notice/document. For example, let's assume that a debt collector sends you a summons, an official notice telling you that you have been sued and when you must appear in court for trial. After you receive the summons, you call the debt collector and settle the debt for less than what you owe on it and as a result, the debt collector leads you to believe that he will not try to collect the debt any more and that the scheduled trial will be cancelled. However, the trial does take place but, since you understood that there would be no trial, you do not attend and as a result, the debt collector is awarded a default judgment in his lawsuit against you. (A default judgment means that the debt collector has automatically won his lawsuit and is now entitled to use various collection tools to get the money from you that the judgment entitles him to collect. Those tools may include taking assets that you owe, and garnishing your wages, etc.)
- Threaten to ruin your credit forever. Yes, having negative information in your credit record will make it difficult to get new credit at reasonable terms right away. However, the FCRA, which is also enforced by the FTC, says that most negative credit record information, including the fact that one of your accounts is in collections, must be deleted from your credit record after seven years. (Even a bankruptcy cannot be reported longer than ten years.) Therefore, a debt collector cannot ruin your credit forever. It's an empty threat.
- Falsely imply that the document he has sent to you is a legal document or that he has taken legal action against you when he has not. For example, a debt collector cannot try to scare you into paying a debt by mailing you a document that looks like a court summons.
- Falsely claim that the debt collector is affiliated with a credit bureau by using the words “”credit bureau” on the letterhead and/or envelopes he uses to communicate with you about a debt.
- Imply that your employer will find out about your debt because the debt collector intends to “”review” or “investigate” your employment.
- Imply or represent that he is any way affiliated with the federal government, state government or with a law enforcement agency. Among other things therefore, a debt collector can't pretend to be a law enforcement officer and cannot use letterhead, envelopes or a company name in order to make his correspondence appear to have come from the federal government, your state government or from a law enforcement agency.
- Represent or imply that he is an attorney or that any communication related to a debt that he wants to collect was sent by an attorney, unless of course the debt collector is an attorney. Also, a debt collector cannot contact you on an attorney's letterhead if the attorney has not reviewed information related to your debt and knows little if anything about the debt. However, the debt collector can use an attorney to prepare collection-related letters and to initiate a legal action against you to help collect a debt that you owe.
- Misrepresent the “character, amount, or legal status” of a debt that he wants to collect from you. For example, the debt collector cannot exaggerate the amount of money that you owe or try to collect a debt that you discharged (or wiped out) through a Chapter 7 liquidation bankruptcy. In its 2005, the Federal Trade Commission said this was the #1 complaint it received from consumers about debt collectors.
- Sue you to collect a debt after the legal statute of /imitations on that debt has expired.
- Put pressure on your parents, spouse or on another relative to pay your debt for you or to get you to pay your debt yourself (unless they co-signed the debt).
If a collector takes any of the actions on the preceding list, contact a Board Certified Consumer Bankruptcy law attorney right away. You should also file a complaint against the debt collector with the FTC and with your state attorney general's office if your state has its own consumer debt collection law and the debt collector's action is prohibited by that law.
The FCDPA is very specific about how and when a debt collector can contact you about a debt and also places restrictions on where he can contact you. For example, the law says that a debt collector can contact you about a debt using the phone or the mail but cannot use a postcard or an envelope that indicates in any way that it was sent by a debt collector.
According to the FDCPA, debt collectors cannot contact you “”at any unusual time or place or a time or place known or which should be known to be inconvenient.” Ordinarily, this means that a debt collector must call you between 8 AM your time and 9 PM your time. However, if you let the debt collector know that being called during that time is not convenient for you and if you provide him with a more convenient time to call, the debt collector must limit his calls to that time. If a debt collector does not, he has violated the FDCPA. For example, if you work a night shift and sleep each day until 313M, it is probably not convenient to be called in the morning. Therefore, if you ask the debt collector to call you at another time but he continues to call you while you are sleeping, the debt collector is breaking the law.
The FDCPA also says that a debt collector cannot call you at your place of work if he knows, or has reason to know, that your employer does not want you contacted there during working hours. Therefore, if you tell a debt collector, “”My employer doesn't want you to call me when I am at work,” the collector should not call you there again. The same holds true if you tell a debt collector that you do not want to be called at work because it is not convenient for you to receive calls on the job. For example, if you are a minister, it is probably not convenient to receive calls from a debt collector on your cell phone on a Sunday morning since you will probably be working at your church. Therefore, if the debt collector knows that you are involved in church services on Sunday mornings but keeps calling your anyway, he has violated the law. By the way, despite what the FDCPA says about calls at work, according to the FTC's 2005 report, the agency received numerous complaints from consumers who said that debt collectors had continued to call them on the job after they had asked the collectors not to call them there again.
Put all requests about when to call you in writing and keep a copy for your files. Send each request certified mail, return receipt requested so that you have proof that the debt collector received it. If you end up having to sue the debt collector, the letter and the receipt will help prove to the court that you told the debt collector to call you at a specific time.
If a debt collector ignores your requests about when to call you, make note of that fact on your Collector Contact Work Sheet and get in touch with a consumer law attorney right away. The attorney can tell you how to handle the situation and advise you about what you should and should not do about the debt collector. Also the attorney may be able to provide you with advice that could help strengthen a potential lawsuit against the debt collector if you ended up suing him.
If a debt collector does not know how to reach you, the FDCPA says that he can contact your employer, a neighbor, a relative, or someone else to find out your phone numbers and address. However, if the debt collector already knows how to reach you, he is violating the FDCPA if he contacts these other people.
When a debt collector contacts a third party to find out how to reach you,he annot ask them anything else about you nor can he tell them why he is trying to locate you. The FDCPA also requires that debt collectors provide the people they call with specific information. For example, a debt collector:
- Must identify himself when he calls someone else and must explain that he is trying to get in touch with you. However, he cannot indicate the name of the company he works for unless he is asked.
- Cannot call someone more than once to obtain your contact information, unless, the person the debt collector speaks when he calls the first time asks him to call back or unless the debt collector has reason to believe that the person he spoke with gave him incorrect information.
- Cannot use a postcard or an envelope that indicates it was sent by a debt collector to contact someone else about you.
A debt collector generally may discuss your debt with your current spouse. If a debt collector has revealed information about your personal, individual debts that your spouse is not responsible for, and you feel the collector has violated your privacy, however, you may want to talk with a consumer law attorney to find out if other state laws may apply.