What is the Fair Debt Collection Practices Act - FDCPA?

People you owe money to have a right to attempt to collect what's owed to them. But they do have to play by the rules. That's where the Fair Debt Collection Practices Act (FDCPA) comes in.

The FDCPA helps keep you safe from harassment and unfair treatment. If you're being contacted by debt collectors, know your rights.

What Is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act is a set of federal rules that keeps debt collectors in check. Specifically, the FDCPA spells out what debt collectors can and can’t do when attempting to collect certain types of debt.

In short, the Act is there to protect consumers from abusive, unfair, or deceptive practices. It applies to a range of different entities, including:

• Debt collection agencies

• Debt buyers

• Debt-collection attorneys

• Third-party companies that purchase past-due debts in order to collect them

The FDCPA, along with the Fair Credit Reporting Act (FCRA) and the Fair Credit Billing Act (FCBA), is meant to protect your interests as a consumer. 

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What Is the Purpose of the FDCPA?

The FDCPA exists to enforce limits on debt collectors. Without these rules, debt collectors would have free rein to use deceptive or unfair tactics to get consumers to pay debts.

The FDCPA lays out clear guidelines for when and how debt collectors can pursue debts. Here’s the breakdown of what’s okay and what’s not:

• When can debt collectors contact you? A debt collector generally can't contact you at a time or place that's unusual or is otherwise known to be inconvenient to you. (You get to be the one to tell them what’s inconvenient for you.) They also can't contact you before 8:00 AM or after 9:00 PM.

• Can debt collectors call other people? They can’t call you at work if they know you’re not allowed to take calls there. They can reach out to your friends or family, but only to find out how to get in touch with you.

• Is harassment off-limits? Debt collectors can’t harass you or anyone else about a debt. That includes spamming you with calls, texts, or emails

• What if you have a lawyer? If a debt collector knows you have a lawyer for debt collection purposes, they have to stop calling you and talk to your lawyer instead.

Debt collectors can't continue contacting you if you formally request that they stop calling or writing to you about a debt. They also can't offer misleading information to try to trick you into paying. 

For example, a debt collector can't tell you they're going to sue you to get you to pay unless they actually plan to do so. They also can't impose unfair fees or fines in connection with an unpaid debt.

What Debts Are Covered by the FDCPA?

The FDCPA applies to specific kinds of debt, like:

• Mortgage loans

• Credit card debt

• Medical bills

• Other personal debts, like personal loans

If you fall behind on any of these, debt collectors have the right to contact you about the balance.

What Debts Aren't Covered by the FDCPA? 

The FDCPA doesn’t cover all debts. It doesn’t apply to:

• Business debts

• Collection efforts by the original lender 

If you take out a $100,000 loan to start a small business but the business fails, for example, you can’t use the FDCPA as a shield against debt collection. The same is true if you take out a $100,000 loan and the original lender is trying to collect.

What Is an FDCPA Violation?

There are certain things debt collectors can't do under the FDCPA. Debt collectors may be guilty of FDCPA violations for any of the following:

• Failing to validate debts in a timely manner, if a consumer requests debt validation. 

• Falsely representing who they are or who they work for. 

• Implying that they're an attorney or that they work for an attorney when they do not.

• Communicating false information regarding a debt. 

• Using threatening language or verbally abusing consumers.

• Threatening consumers with physical harm.

• Collecting interest or fees that aren't authorized by law. 

• Threatening to sue or to repossess property when they have no intention of doing so.

• Depositing or threatening to deposit a postdated check before the date marked on the check. 

• Using any type of deceptive means to collect a debt.

• Contacting consumers about a debt via postcard.

If you think a debt collector has violated your rights under the FDCPA, you have the right to fight back. Specifically, you're allowed to sue the debt collector for damages.

Under FDCPA rules, debt collectors can be on the hook for:

• Any actual damages you sustain as the result of a violation

• Punitive damages of up to $1,000

• Any attorney's fees or court costs you had to pay to file the lawsuit

The only way for a debt collector to escape liability is to show that any violation wasn't intentional, was a bona fide error, or that they acted on an advisory opinion of the Federal Trade Commission (FTC) in good faith. Otherwise, the court could order them to pay you for the violation.

If you're being harassed or think your rights have been violated, be sure to document it. Having supporting documents could help bolster your case if you need to sue a debt collector for an FDCPA violation.

Document Your Communications with Debt Collectors 

When debt collectors contact you, make a record. Use letters or emails instead of phone calls to document the details. If you talk on the phone, write down the date, the person’s name, and what you talked about. If you can, record the call.

• Why you should keep records. Having proof makes your case stronger if you take a debt collector to court for breaking the FDCPA. Some collectors will back off when they realize you 1) know your rights and 2) have the documentation to support your case.

• Debt collectors don’t often violate the FDCPA. The government received nearly 110,000 debt collection complaints in 2023. Of those complaints, less than 1% were closed with some monetary relief for the borrower.

How to Stop Debt Collectors from Bothering You

You can stop debt collectors from contacting you by formally requesting they stop. You could send a cease-and-desist letter to debt collectors, file a complaint with the Consumer Financial Protection Bureau, (CFPB), or seek debt relief to stop debt collectors from calling you.

Send a letter to debt collectors

If you want bill collectors to stop calling, you must ask them to do so in writing. This request is called a cease-and-desist letter. 

Debt collectors can still reach out for a few things, like:

• Confirm they’re done contacting you.

• Let you know they might take legal action.

• Say they’re taking legal action.

For example, a debt collector might stop calling regularly but later send a letter saying they’re taking you to court for your debt. 

One important thing to note is that if you tell a debt collector to stop calling you, they may have no other option but to sue you. If they can’t contact you, it’s hard to work out an agreement to resolve the debt. If you want to keep the lines of communication open, a cease-and-desist letter might not be the best move to make.

Send a complaint to the CFPB

If you think debt collectors have gotten the wrong person—which does happen—contact the CFPB. More than half the complaints in 2023 were about collectors trying to collect debts not owed.

You can send a complaint through the CFPB website.

The CFPB handles almost all the complaints it receives. More than half (63%) were sent to debt collectors for their response in 2023, and nearly all companies responded. 

Consider legal action

Let debt collectors know you might take them to court if they’re violating FDCPA rules. If they think you have a valid case, they might give up because they don’t want to deal with court costs or payouts.

Seek debt relief

If you've already fallen behind, you might look into credit card debt relief instead. Debt relief refers to different solutions for managing credit cards and can include:

• Debt consolidation. Combining debts with a debt consolidation loan or a 0% APR balance transfer could help you simplify debt pay-off while saving on interest. 

• Debt management plan. A structured payment plan through a credit counselor could help you make more headway against the debt.

• Bankruptcy. Filing for Chapter 7 bankruptcy, if you qualify, could erase your debts entirely.

• Negotiating debts. Negotiating your debts, often with help from a professional debt settlement company, could help you significantly reduce the debt.

Talk to a credit counselor or debt specialist to figure out which option might work best for getting rid of debt.

Before Debt Collectors Bother You

You can avoid dealing with debt collectors by staying in touch with your creditors. 

Say you lose your job and can’t pay your credit card bill. You can call your credit card company and ask if they have a hardship program to help out. Some of the benefits of these programs are:

• Reduced or waived monthly payments

• Reduced or waived fees

• Reduced interest rates

Many options could put a stop to debt collection calls, but they don't all work the same way. 

Talking to a credit counselor or Certified Debt Consultant can help you decide what path might be right for you if you're dealing with debt collectors.