Debt collection is a daunting prospect for those who have fallen behind on payments. It’s sometimes the case that third-party debt collectors will attempt to collect debts on behalf of another person or entity, which can lead to increased stress for the debtors facing the potential of bankruptcy. The Fair Debt Collection Practices Act (FDCPA) is a federal law that was put in place to limit the actions of any third-party debt collectors.
The law restricts how collectors can contact debtors, as it limits the amount of times contact can be made each day. It also impacts the time of day in which contact can be made, as a debt collector is forbidden to communicate with a debtor at an inconvenient time. This is generally before 8:00am or after 9:00pm in the debtor's time zone. The debtor can sue the debt collection agency for damages if they attempt to bypass the FDCPA.
This guide will take a closer look at the FDCPA to help give you a better understanding of your lawful rights and give you a fair chance to repay debts if you have fallen behind on repayments.
How the FDCPA Works
To make debt collection a fair and non-aggressive procedure, the FDCPA establishes a framework that debt collectors are permitted to follow. The regulation restricts the way collectors can speak to the debtors, the time of day they can call and the way they can portray themselves. This means that no foul language can be used that is deemed to be aggressive, as it is against the law for them to harass or threaten you while attempting to collect a debt.
Debtors who are being sued for personal debts are not protected by the FDCPA. This means that if the proprietor of the neighbourhood hardware store phones you to collect money you owe them, that individual is not legally a debt collector.
Debt collection agencies that employ third-party debt collectors are the only type of collector covered by the FDCPA. It covers a variety of different debts, including credit card debt, school loans, mortgages, medical expenses and any household debts.
Other FDCPA Rules
There are some other rules that are put in place by the FDCPA to ensure the fairest debt process possible for the debtor. Some of these include:
Debtors can stop collectors from calling their home phones if a letter request is sent to the debt collector. It is advised to send the letter by Certified Mail and pay for a return receipt.
Debt collectors can contact friends or family to get the debtors contact information, but they are forbidden to share information about the debt. They can only call third parties one time each.
The debt can only be discussed with the debtor or their spouse from the debt collectors.
Lies, deceitful information and obscene language from the debt collector is strictly prohibited.
Debt collectors can not threaten to sue a debtor unless there is a true intention to take the debtor to court.
Debt collectors must offer you a reasonable and simple method for you to opt out of specific types of communication.
In most cases, a debt collector is required to stop contacting you and get in touch with your corporate lawyer if they are aware that you are being represented by one.
A debt collector is not allowed to physically come to your place of employment.
Can a Debt Collector Contact Me on Social Media About a Debt?
There are specific laws put in place by the FDCPA that debt collectors must follow in regards to contacting debtors via social media. Any messages sent by the debt collector to debtors must be private to keep the integrity of the process, as if it is viewable by the general public it can be viewed as defamation which goes against FDCPA.
They must also identify themselves as debt collectors to avoid any deceit or lies, as this can mess with the process. If a debt collector sends you a friend request on a social media platform or adds you to their contacts, they need to make you aware of who they are beforehand. You are well within your right to reject these requests, but it means the debt collector is liable to find an alternative way to contact you as long as it’s within the law.
Debt collectors must also provide you, in each message, a simple way to opt out of receiving further communications from them on that social media platform. For example, if they are contacting you on Instagram but you are not happy for them to use this platform, you can opt out of communicating with them on there.
Final Thoughts
Understanding your rights as a debtor under the FDCPA is very important for giving you the fairest process for repaying your debts. It is always advised that you pay back your debts as soon as possible to avoid any debt collectors requiring to contact you. However, if you need more time, make sure you are aware of the laws in place by the FDCPA so that you know if a debt collector is being unlawful.
If you do have trouble paying your debts, there are credit insurance brokers that offer options like bad debt insurance that can help you with repayments and prevent you from getting into trouble with debt collection agencies.
