The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (“FDCPA”) is a federal law that Congress enacted to protect people from abusive, deceptive or unfair debt collection practices. Below is a simplified and condensed version of the FDCPA prepared by our law firm that will make it easier for non-attorneys to understand their rights. Among the topics discussed below are:
- Important Definitions
- Communication with the Consumer (you)
- Stopping Communication
- Contact with Third Parties
- Harassment or Abuse
- False or Misleading Representations
- Unfair Practices
- Proof that a Debt is Valid and more
- “Consumer”: Any person who owes, or is claimed to owe, a personal debt.
- “Debt Collector”: Refers to a person or company that regularly attempts to collect personal debts owed to someone else.
- “Creditor”: Any person or company that extends credit creating the debt. This does not include companies looking to collect payment that obtained the debt once it entered default.
Communication with the consumer:
Generally, without a consumer’s prior consent, it is illegal for a debt collector to engage in any of the following communications:
- To call a consumer at any unusual or inconvenient time or place (usually after 8 a.m. and before 9 p.m., local time at the consumer’s location);
- To communicate with a consumer who is represented by an attorney; and/or
- To call a consumer’s place of employment if the debt collector knows or has reason to know that such calls are prohibited by the employer.
Generally, if a consumer writes a debt collector a letter stating that they refuse to pay a debt or that the consumer wishes the debt collector to just stop contacting them, the debt collector must not communicate with that consumer any longer.
Contact with third parties:
Generally, a debt collector must obtain the prior consent of the consumer to communicate with a third party (i.e. certain relatives, friends, neighbors, co-workers, etc.). In the absence of this consent, a debt collector can only speak with the consumer, their spouse, his attorney, a consumer reporting agency, the creditor, the attorney of the creditor, or the attorney of the debt collector.
Harassment or Abuse:
A debt collector cannot harass, oppress, or abuse any person in connection with the collection of a personal debt. This generally includes, but is not limited, to the following:
- Using, or threatening to use, violence (or other criminal means) to physically harm any person, including their reputation or property.
- Using obscene or profane language or language meant to abuse the person hearing or reading the language.
- Repeatedly or constantly causing a telephone to ring, or engagingany person in telephone conversation, with intent to annoy, abuse, or harass any person at the called number.
- Placing telephone calls to the consumer without providing information about the caller’s identity.
False or Misleading Representations:
A debt collector cannot engage in false, deceptive, or misleading conduct while trying to collect a personal debt. This generally includes, but is not limited to, the following:
- Falsely claiming that the debt collector is affiliated with the Unites States or any State (including New York).
- Falsely representing the amount of the debt, what type of debt it is, or the legal status of the debt.
- Falsely implying or representing that an individual is an attorney or that a communication is from an attorney.
- Falsely implying or representing that non-payment of the debt will result in arrest, imprisonment, seizure, garnishment, attachment, etc., unless such action is lawful and the debt collector intends to take such action.
- Threatening to take any action that cannot legally be taken or that is not intended to be taken.
- Falsely leading a consumer to believe that they committed a crime in order to disgrace the consumer.
- Communicating or threatening to communicate credit information to any person, when it is known (or should be known) that the credit information in question is false. This includes failing to communicate that a
debt is disputed.
- Using false or deceptive means to collect or attempt to collect any debt or to obtain information about a consumer.
- Failing to disclose in their initial communication with the consumer 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 later communications that the “communication is from a debt collector.”
- The false representation that documents are legal process (i.e. lawsuit papers) when they are not.
- The false representation that documents are not legal process forms or do not require action by the consumer when they do.
A debt collector may not use unfair means to collect or attempt to collect any debt. This generally includes, but is not limited to, the following:
- Collecting any amount of money (including any interest, fee, charge, or expense incidental to the principal obligation) unless the amount is expressly authorized by the agreement creating the debt or permitted by law.
- The acceptance of a check or other payment instrument (from any person) that is postdated by more than 5 days, unless that person gets notified in writing of the debt collector’s intent to deposit the check or instrument between 3 and 10 days before the deposit is made.
- Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.
- Using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by mail, except that a debt collector may use its business name if it doesn’t indicate that the debt collector is in the debt collection business.
Proof that a debt is valid:
Within just 5 days after the initial communication with a consumer, a debt collector must send the consumer a written notice (unless this information was disclosed over the telephone) containing:
- The amount of the debt;
- The name of the creditor to whom the debt is owed;
- 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”;
- 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 deb collector”; and
- 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.”
If a consumer notifies a debt collector in writing within the 30-day period described above, that any portion of the debt is disputed (or that the consumer wants the name and address of the original creditor), the debt collector must cease collection of the disputed portion of the debt until verification of the debt (or the name and address of the original creditor) is obtained and mailed to the consumer.
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.
A consumer’s failure to dispute the validity of a debt cannot be used as an argument in Court as to why the debt is owed.
If a consumer owes multiple debts and makes a single payment to a debt collector with respect to those debts, the debt collector cannot apply those payments to any debt that has been disputed by the consumer and (where applicable) must apply the payment in accordance with the consumer’s directions.
Legal actions by debt collectors:
Any debt collector who brings a legal action to enforce an interest in real estate must bring the action only in a judicial district or similar legal entity in which such real estate is located.
If a debt collector brings a legal action to collect a personal debt, the action must be brought in the judicial district or similar legal entity where:
(a) The consumer signed the contract that is the basis of the lawsuit; or
(b) Where the consumer resides at the time the action is started.
Furnishing deceptive forms:
It is illegal for a debt collector to design, compile, and furnish any form knowing that it would be used to falsely mislead a consumer to believe that someone other than the alleged creditor is participating in the attempted collection of the debt.
A debt collector’s civil liability:
Any debt collector who fails to comply with any provision of the FDCPA (with respect to any person) is liable to that person for:
- Any “actual damage” sustained by such person as a result of such failure (i.e. emotional distress, out of pocket financial loss, etc.);
- Additional damages as the court may allow (but not more than $1,000.00), and
- In the case of any successful action to enforce the foregoing liability, the costs of the action, together with reasonable attorney’s fees as determined by the court.
However, if the court decides that an action was brought in bad faith and for the purpose of harassment, the debt collector may be awarded their reasonable attorney’s fees and costs.
Factors considered by the courts:
In determining the amount of liability to be awarded a consumer, the court shall consider (among other relevant factors):
- The frequency and persistence of noncompliance by the debt collector,
- The nature of such noncompliance, and
- The extent to which the noncompliance was intentional.
An action to enforce any liability created by this law may be brought in any appropriate United States district court or in any other court of competent jurisdiction, so long as it is filed within 1 year from the date on which the violation occurs.