Fair Debt Collection Practices Act

Fair Debt Collection Practice Act summary:

• The Fair Debt Collection Practices Act provides legal guidelines that debt collectors must follow.

• FDCPA guidelines cover how and when debt collectors can communicate with you, debt validation requirements, and prohibited practices.

• The FDCPA allows you to request in writing for a debt collector to stop contacting you, but the debt collector could still sue you to collect the debt.

Fair Debt Collection Practices Act Definition and Meaning

The Fair Debt Collection Practices Act (FDCPA) is a federal law that covers third-party debt collection practices. A third-party debt collector isn't the original creditor you borrowed from; instead, they're typically hired by creditors or debt buyers, so they have the right to try and collect the debt. 

The FDCPA sets rules for how third-party debt collectors can communicate with you about debt, including the time, place, and communication method. This law also prohibits harassment from debt collectors. If a debt collector violates the FDCPA, you are allowed to file a lawsuit or a complaint with a government agency.

A Comprehensive Breakdown of the Fair Debt Collection Practices Act

When you owe money, you’re a debtor. The FDCPA protects debtors’ rights and provides reasonable guidelines for debt collectors to follow. This law specifically governs third-party debt collectors. A third-party debt collector is one that collects another company’s debts. 

The FDCPA doesn’t apply if a creditor is attempting to collect on its own debt (other laws apply in this situation).

Here’s a summary of the main rules that the FDCPA establishes for debt collectors.

Communication with the debtor

Debt collectors can’t communicate at a time or place that’s inconvenient for you. The FDCPA prohibits calls at unusual hours, generally before 8 a.m. or after 9 p.m. in your time zone. Calls outside of normal hours are allowed if you’ve given the debt collector permission. If you get a call at an inconvenient time, you can tell the debt collector and they must end the call.

A debt collector can’t contact you at work if there’s reason to believe your employer doesn’t allow personal calls. If a debt collector knows that you’ve hired an attorney for your debt and can easily find the contact information, or if you’ve provided that information, the debt collector must contact your attorney instead of you.

Verification of debt

You have the right to receive proof of any debt you allegedly owe. Within five days of initially contacting you, a debt collector must send you a written validation notice that includes:

• The amount of the debt

• The name of the creditor

• Notice that you have 30 days to dispute the debt

• A tear-off dispute form with prewritten prompts

If you dispute any portion of the debt within 30 days, the debt collector must stop all collection efforts until it has mailed you a copy of the verification of the debt.

Ceasing communications

You can end communications with a debt collector at any time. Send the debt collector a letter by mail and either request that the debt collector cease contacting you or state that you refuse to pay the debt. Ideally, use certified mail so you have proof of delivery.

Once the debt collector receives your letter, it must cease contact except to advise you that:

• It’s ceasing communications as requested.

• The collection effort is being stopped.

• It may or will take legal action.

Note that if you tell a debt collector to stop contacting you but they believe the debt is legitimate, their only recourse could be to file a debt lawsuit against you. In most cases, it’s better to keep the lines of communication open.

Prohibited practices

The FDCPA prohibits harassment, abusive practices, false or deceptive representations, and unfair practices. Here are some of the most notable examples of what a debt collector can’t do:

• Use or threaten violence to harm you, your property, or your reputation

• Use obscene or abusive language

• Claim to be an attorney or to be affiliated with either the federal or state government

• Use any name other than the true name of the debt collector’s business

• Falsely claim that you committed a crime

• Take or threaten to repossess property if the debt collector has no legal right to do so