The FDCPA And You

If you are one of the millions of Americans struggling with the knowledge that you have fallen behind on payments made to creditors and are curious if you have protection from creditor harassment the answer is yes. The protection which is granted to each American is spelled out in the Fair Debt Collections Practices Act (FDCPA). This is great news considering that by the end of 2007 the total credit card debt for the United States was approximately $ 943.5 billion. The FDCPA was passed in late 1977 under the administration of President Carter. This law was passed by Congress to curb or limit the action third party collectors could take against debtors. It sent a message to collectors that the abusive tactics collectors were known to use would not be tolerated.

Debts Covered

The general debts included in the FDCPA are mainly in regards to medical debt, credit cards, personal loans, car loans and mortgage loans-1st and 2nd. To get a more in depth list of debts included in the Fair Debt Collection Practices Act please review the act itself which can be found on Federal Trade Commission website. One point that needs to be noted is the FDCPA does not apply to an in house collection agency. There is ambiguity regarding the previous statement due to the fact that if an in house collector misrepresents themselves as a third party collector they may find that they are subject to laws of the FDCPA. Consumers should keep in mind that each state has its own set of collection laws. Most are very similar to the ones in the FDCPA.

Harassment

The most common form of harassment used by third party collectors is repeated phone calls. The calls usually start out friendly in the initial phase, but soon after is when the calls have been known to escalate to not-so-friendly conversations. Many calls have been deemed to be abusive not only by the debtor but in the eyes of the law. It does not stop at phone calls. Most collection companies are known to send repeated letters which also border on or are considered to be abusive in nature. The most disturbing form of harassment comes in the form of threats issued by the collecting party. These tactics serve no purpose for the person owing the debt. The only good use they have is to increase the profits of collection companies. Obviously this is of no benefit to you the consumer. It only creates more stress and despair on the party trying to solve the debt.

Third party collectors are very aware of the FDCPA; some just choose not to adhere to it whereas other collectors tend to operate right on the border of it. Violations of debtors’ rights include contacting the debtor after receiving written notice not to do such, threatening harm or violence to the owing party, threats of arrest, taking property, garnishing wages unless there is intent to do so and a legitimate cause for that type of action. It is also a violation of the Fair Debt Collection Practices Act to speak with a third party regarding the owner’s debt. This includes relatives, employers, friends and even neighbors. I have seen it happen on numerous occasions where a collector repeatedly calls at the borrower’s place of employment-this has and can result in termination for the employee.

How could this possibly help either party? Now the debtor is without a sufficient means of financial support and in a worse off position than originally thought and the collector has not received funds on the debt owed. It is also important to understand that once your debt has been transferred to a third party collector the collection company is required to notify you by mail that they are trying to collect on the debt. If the debtor disputes the validity of the debt the collection company must now go back to the original creditor for validation that the debt is actually owed. During this time collection activity is not allowed.