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What Legal Protections Do I Have Against Debt Collectors? Fair Debt Collection Practices Act (FDCPA)


Many people are not aware that there are laws which prohibit certain actions from being taken by a collector for a creditor. When an account is sent to a collection firm or a law firm in order to pressure you to pay the bill, the provisions of the Fair Debt Collection Practices Act apply. The key concept here is that the debt is now being “collected” by a third party, not the company, lender or person you borrowed the funds from.

The Fair Debt Collection Practices Act (“FDCPA”) applies to household, family, and personal debts. It also applies to credit card debts, medical bills and your mortgage or home equity loan. The Fair Debt Collection Practices act does not apply to commercial loans or lines of credit obtained by businesses.

A debt collector is not permitted to contact you at unreasonable times of the day or nite to collect the debt. Calls may not be made before 8:00 a.m. or after 9:00 p.m. under the FDCPA. It is against the law for a debt collector to misrepresent the legal status of the debt, or to lie to you and pose as an attorney or government agency. It is illegal for a debt collector to use scare tactics based on a false premise, such as telling you a Summons will be issued or that you have to appear in Court when this is not the case.

One way to stop a debt collector from contacting you is to respond in writing to them and state that you dispute the debt. You can request that proof of the debt ( such as a signed agreement) be mailed to you. Collection must stop when this written ( not verbal over the phone) request is mailed to the creditor at the address they provide you. If you hire an attorney to represent you with respect to the debt, the debt collector must communicate with the attorney. If you hire an attorney to represent you in the case of a business debt, the debt collector must also communicate with your attorney.

Once a debt collector sends you written verification of the debt, they can once again start calling your or contacting you about the non-payment of the debt. The Debt collector is prohibited under the FDCPA to use threats of violence or harm, or use obscene or profane language. A debt collector may send information about a valid debt to a credit reporting agency ( once verified), but they may not publish a list of people who refuse to pay their debts or engage in actions which publicly embarrass the debtor. A debt collector can only send written communication directly addressed to the debtor in a plain, sealed envelope which does not signify that it is from a debt collector. A post card would be an example of an act that clearly violates the FDCPA.

It is important to note, again, that a debt collector is prohibited under the FDCPA to lie to you about the debt in an attempt to influence you to pay it. This means they cannot falsely claim to work for a court, an attorney, a credit reporting agency, a “credit reporting bureau,” a law enforcement agency, etc. A debt collector is prohibited from sending you paperwork that is claimed to be a legal form when it is not. Letterhead that shows a fictitious entity such as the “U.S. Dept. of Justice” would be an example of this type of violation of the FDCPA.

A debt collector may not engage in unfair practices such as adding interest or fees that are not clearly stated in the credit agreement or contract. A debt collector may not deposit a post-dated check you send them before the authorized date on the check. A debt collector may not threaten to take away a debtor's property unless it can be done legally ( such as in the case of a default on a secured debt such as a car loan). Even if a creditor can take legal action to foreclosure on a home or repossess property such as a vehicle, there are other laws which provide due process protections to the debtor. Therefore, be sure to always open and READ your U.S. Mail and e-mail messages from creditors and debt collectors. Contact an attorney if you are confused by the information or have questions. Sometimes being afraid to ask a lawyer a question can have serious consequences if the proper action is not taken to enforce your rights.

A debt collector cannot garnish your wages or attach a bank or financial account without first obtaining a court judgment against you. An exception would be in the case of a bank executing a “set-off” from one account of their customer from another account for the same customer ( such as in the case of paying an overdraft account at your bank). A pre-authorization is always needed in the case of a set-off. Usually, a financial institution will include pre-authorization terms in your account agreement that permits them to take money out of other accounts when loss occurs in an account of the same depositor or customer.

Every state follows a system of exemption laws which protect certain property of a debtor. Most federal benefits are 100% protected against debt collection. Creditors are prohibited from garnishing or attaching through legal process what is known as “exempt” property. Exempt property is property that is listed under a specific state or federal law which provides that the property is protected.

As of the date of this article, a debtor who files a valid claim against a debt collector can receive up to $1,000.00 for each proven violation of the Fair Debt Collection Practices Act. In addition to the statutory damages, the FDCPA allows the Court to award the debtor all of the debtor's attorney fees so long as the legal fees were actually performed and are reasonable as determined by the Court. Court costs can also be awarded to the debtor on a successful FDCPA lawsuit.

You can report violations of the FDCPA not only to your attorney ( who can file a FDCPA lawsuit), but also to the Federal Trade Commission, the United States Consumer Protection Bureau, or the Attorney General of your state of residence.

This article is provided as a basic information guide concerning FDCPA claims. Legal claims are often as varied as the individuals who are involved in the cases. You should always contact a qualified attorney to discuss your options when you feel that a debt collector may be violating the law.

Please feel free to contact Attorney Kevin M. Ryan at (251) 241-5234 for a free consultation.