info@carolinalaw.com
info@carolinalaw.com
The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers from debt collectors’ aggressive and often unethical debt collection practices.
Today, The FDCPA is overseen by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). According to a 2017 CFPB report, around 70 million Americans are contacted by debt collectors each year. Debt collectors are infamous for using unethical collection methods to scare consumers into paying their debts quickly. Understanding the FDCPA is essential when dealing with debt, as knowing your rights can help you save time, reduce stress, and avoid unnecessary expenses.
The FDCPA is a federal law that outlines what debt collectors and agencies can and cannot do when collecting different types of debt.
President Jimmy Carter signed the FDCPA into law in 1977 to protect consumers from aggressive debt collection tactics implemented by debt collection agencies nationwide.
The FDCPA has three main objectives:
The FDCPA defines a debt collector as any person who regularly collects or attempts to collect consumer debts for another person or institution. It is important to note that The FDCPA applies to third-party debt collectors, not original creditors. However, creditors collecting their debts using a different name are subject to the FDCPA.
Before the FDCPA, debt collection companies faced few restrictions on their practices.
Debt collectors can come from agencies that either collect debt on behalf of a company or purchase debt from a company to collect it independently.
Previously, collectors would make calls at odd hours, threaten jail time, inflate the amounts owed, and even contact the debtor’s family, friends, and neighbors. Families facing economic hardships or health crises have historically been the most vulnerable to these invasive practices, which only add to their stress during already difficult times.
Today, collectors must adhere to the certain restrictions when collecting debt.
No! The CFBP says that the FDCPA prohibits collectors from using false, deceptive, or misleading practices. Collectors can not lie about any aspect of the debt or themselves. This includes:
According to the FDCPA, debt collectors must provide debtors with certain information in their initial communications. If the collector did not give that information and the debtor did not pay their debt within five days of said initial communication, then the following information also needs to be sent in written form:
The Federal Reserve outlines many other rules that collectors and agencies must follow when collecting debt. We highly recommend reading the FDCPA in its entirety to understand your rights.
At Maginnis Howard, we are all too familiar with the unethical practices of these debt collectors and their agencies. To ensure your rights are protected, we recommend taking the following steps:
