Fair debt collection practices act
The purpose of the fair debt collection practices act is to stop the abusive, deceptive and unfair practices of some of those who are in the profession of collecting debts.
Whether it is a company, agency or an attorney this act covers those who regularly collect debts or buy the debt and then proceed to try and collect that debt.
The type of debts covered are personal, family and household debts.
They do not include those debts that are incurred as a result of running a business.
The Federal Trade Commission is the agency whose job it is to enforce this act.
Prohibitions Of The Fair Debt Collection Practices Act
These prohibitions are in the event of when there is no prior consent by the consumer or permission by a court of competent jurisdiction directly giving that permission to the collector.
Collection of debts cannot be at a time inconvenient or at a location known to be inconvenient.
The time set by this act is no earlier than 8:00 AM and no later than 9:00 PM.in the consumers local time.
Direct communication with the consumer even though it has been established that they are represented by an attorney....Unless that attorney fails to communicate in a reasonable amount of time or the consumer has given consent for such direct
The collector cannot call the consumer's place of employment if the collector has knowledge or reason to believe that the employer prohibits such calls.
Collectors cannot communicate with any third parties of said debt other than the consumer , the consumer's attorney, a credit reporting agency(only if permitted by law),the creditor, the creditor's attorney or the attorney of the debt collecting agency.
Requirements of the fair debt collection practices act
The fair debt collection practices act requires debt collectors when communicating with other persons with purpose of obtaining information to locate that consumer the collector must....
- identify themselves as a debt collector
- state that they are only confirming or correcting information
- Not state that the consumer owes any money
- Not communicate more than once unless directed to do so by that person
- Not communicate by postcard
- May not use any language or symbols on the envelope that signify that the collector is in the debt collection business.
THE CONSUMER according to the fair debt collection practices act,
has the right to notify (usually in writing) a debt collector that he refuses to pay the debt OR that the consumer wishes the collector to cease further communication.
The Debt Collector must
cease except to advise the consumer that further efforts will cease
notify the consumer that the creditor or collector will invoke a special remedy (usually court)
Other Prohibitions Of The Fair Debt Collection Practices Act
The debt collector cannot engage in conduct that consequences in harassment, oppression or abuse of those that they attempt to collect a debt from including......
- the use of or threat of use of violence or other criminal means resulting in physical harm to person, reputation or property.
- the use of obscene or profane language or any language to abuse
- publicate a list of persons who allegedly refuse to pay debts
or advertise the sale of any debt to coerce payment.
- cause a telephone to ring or engaging any person in telephone
conversation repeatedly or continuously with intent to annoy abuse or harass any person at the called number.
- placing calls without meaningful disclosure of callers identity.
Collectors Making False Or Misleading Statements
Usually these are made in an attempt to expedite payment of the debt hoping to fear the consumer in doing so.
The fair debt collection act forbids debt collectors to use false,deceptive or misleading statements when trying to collect
the debt including use of the following.
Falsely implying the collector is affiliated in any way with the United states government or any state government including the use of any badge, uniform ect.
The use of false documents in any written communication which falsely imply they have been issued by authorized or approved by any court of law of the U.S. or any state.
False representations of the character, amount or legal status of any debt AND or
services rendered or compensation which may be lawfully received by any debt collector for the collection of
any debt. (exaggerating the interest or other amounts that they may add on to the original debt)
Falsely implying that they are an attorney when they in fact are not.
Falsely implying that the nonpayment of debt will result in arrest or imprisonment of any person or that conduct such as seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.
(If this type of action could be taken it would certainly be after some sort of court action and would be at the discretion of the judge proceeding the affairs. Not only would this kind of
false implication violate the FDCPA but would certainly no doubt bring up an air of resentment with any judge over the presumptuousness of a debt collector to determine the end result of any court action.)
Make any threats of taking action that cannot legally be taken or make threats of actions that they do not intend to take.
Falsely imply that the sale, referral or transfer of interest in the debt will cause the consumer to lose any claim
or defense to payment of the debt.
(usually the agency will hold the debt for 6 months and then sell to another agency. The collector may try making these claims as they work on a commission basis. Once the debt is sold to another agency there is no more chance for collection at that agency or the commission they may collect)
Falsely imply that the consumer committed any crime or other conduct in order to disgrace the consumer.
(nowadays they would get laughed at by most consumers for this statement)
Communicating to any person about credit information that is known to be false or failing to communicate that a disputed debt is indeed disputed.
More prohibited practices by the fair debt collection practices act:
Use of any means of false representation or deceptive means in order to collect or attempt to collect a debt or to obtain information concerning a consumer.
A big legality issue in the fair debt collection practices act is the following.
Failure to recite or use in written communication which ever is the initial form of communication what is referred to as the mini Miranda.
The one the collector states this way..."This is an attempt to collect a debt and that any information obtained will be used for that purpose"
and must continue to use this statement in subsequent communication unless in formal pleading such as a court of law.
To falsely imply that the account has been turned over to an innocent purchaser for value.
(RIGHT....they always go to bill collectors for pennies on the dollar and they are by no means innocent)
To falsely imply that documents are legal process. And conversely that they are not of legal process when they are so and imply that there is no course of action required by the consumer.
To use any other business name than that of their own.
To falsely imply that the collector is employed by a credit reporting agency.
Unfair practices of debt collectors
The fair debt collection act states that a debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.
Violations of this would be...
- The collection of any amount including any fees, interest ect. that was not expressly authorized by the agreement that created the debt or permitted by law.
- Postdated checks accepted by the collector cannot be for more than 5 days unless the person is notified of the date the collector intends to deposit that check at least 3 days prior to that deposit and not more than 10 days prior.
( MY advise, as this prohibition is very confusing(which is just
what the debt collectors would probably like) is DON'T post date
a check, they get the money when you have it!!! in your account.)
- Solicitation of the collector for a postdated check or any other postdated payment for the purpose of threatening or instituting criminal prosecution.
- Depositing postdated payments prior to the date postdated on the payment.
- Causing charges by way of collect calls or telegrams by concealing the true nature of the communication.
- Taking or threatening to take possession of property claimed as collateral when there is no right to take possession or there is no intent to take possession or the property is exempt by law.
The fair debt collection practices act requires the collector to validate the debt in the following way:
After 5 days of the initial communication, unless this information has been included in the initial communication or the debt has been paid, the debt collector must send the consumer a written notice of the following
the amount of the debt, the name of the creditor to whom the debt is owed
the statement that unless the consumer, within 30 days of the receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will assumed to be owed by the debt collector.
another statement required by the fair debt collection practices
act that states that if the consumer notifies the debt collector in writing within 30 days that the debt, or any portion, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy will be mailed to the consumer.
a notice that states that upon the consumer's written request inside of the 30 day period, the debt collector will provide the name of address of the original creditor if different from current creditor.
The fair debt collection practices act also states that if the consumer notifies the debt collector with in the 30 day period of either events (a dispute or request of original creditor), the debt collector must cease collection activity until the collector obtains verification of the debt or a copy of any judgment or the name and address of original creditor, and the information is mailed to the consumer.
Failure of a consumer to dispute the validity of a debt may not be construed by any court as an admission of liability by the consumer.
The initial communication cannot be in the form of a formal pleading (court) or communication regarding a court date. (It has to be written and the validation of debt has to be established)
If the consumer has multiple debts with a debt collector,the fair debt collection practices act states the collector cannot apply a portion or any part of a single payment to a debt in dispute and must apply that payment by way of the consumers directions.
Legal actions taken by debt collectors in accordance with the fair debt collection practices act:
A debt collector that brings legal action upon a consumer concerning a debt owed in the case of real property that
it has an interest on must bring that action on only in a judicial district where the property is located
or in the case of other types of debt the action must be in a judicial district of where the consumer signed a contract or area where the consumer resides
at the start of such action.
According to the fair debt collection practices act it is unlawful to design or furnish any form that is knowingly creating the false belief in a consumer that a person other than
the creditor of the consumer is participating in the collection or attempt to collect when they are in fact they are not participating.
(Example would be if the collector implied that the attorney general of the state you live in were involved with the collection of a
debt when they are not in fact involved at all.)
Civil Liability of Debt Collectors
The fair debt collection practices act states that any debt collector who fails to comply with any provision of this title in respect to any person is liable to such person in an amount equal to the sum of any actual damage sustained by such person as a result of such failure;
in the case of any action by an individual, additional damages as the court may allow not exceeding $1000.00
in the case of a class action
same amount as above for each plaintiff named and amount allowed by court may allow for all other class members not to exceed $500,000.00 or one per centum of net worth of debt collector
in the case of a successful action to enforce the foregoing liability, the costs of the action and reasonable cost of attorney's fees (determined by the court).
The court will consider such factors as the frequency and persistence of noncompliance by the debt collector
the nature of the noncompliance and extent to which the noncompliance was intentional
in a class action additionally will be looked at
the resources of the debt collector
number of persons adversely affected
The fair debt collection practices act additionally states that a debt collector will not be held liable if they show evidence that the violation was not intentional and resulted from a bona fide error.
Actions to enforce any liability created by this title may be brought in any U.S. district court without regard to the amount
in controversy and within one year from the date on which the violation occurred.
As one can see by the reading of the fair debt practices act, debt collectors have many boundaries in their attempt to collect debt from consumers.
Knowing the boundaries if you are the one being pursued by one of these collectors can give you the "one up" in the situation.
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