Fair Debt Collection Act

Evidence was presented to the U.S. House of Representatives and the Senate that creditors were using unfair practices to coerce debtors into paying their debts. Many of these unfair practices placed strain on marriages and families, led to loss of jobs, invaded privacy, and contributed to the increase of personal bankruptcies.  Our federal lawmakers felt that abusive collection practices were not necessary, so they passed a law that clearly stated the dos and don’ts of collection.  This law is known as the Fair Debt Collection Practices Act.  Individual states may have similar laws that may be more restrictive in some areas than the federal laws. You may want to check your local library for a copy of your state statute dealing in collection practices.

Under the Fair Debt Collection Practices Act, you, as the debtor, have many rights.  As with many things, if you do not know your rights, you may be treated unfairly and think that you just have to sit back and take it. NO MORE! Some of your rights, according to the Fair Debt Collection Practices Act are as follows.

What Creditors Can’t Do

• You cannot be contacted at a time or place that is known to be inconvenient to you. Unless a creditor knows your schedule, it is assumed that convenient is between 8:00 a.m. and 9:00 p.m.
• You cannot be contacted at your place of employment if the creditor knows or has reason to know that your employer prohibits such calls.
• Your creditor cannot disclose details about your debt to anyone other than a spouse, parent (if debtor is a minor), guardian, executor, or administrator.
• Creditors cannot use threat of violence or other criminal means to harm you, your property, or your reputation.
• Creditors are not to use profane or obscene language or language which is abusive to you.
• Creditors cannot phone repeatedly or continuously with intent to annoy, abuse, or harass the person at that number.
• Creditors can, if trying to locate you, make contact with others only for the purpose of acquiring your whereabouts. They are not to reveal that you owe a debt or disclose their business name, unless expressly requested to do so.  They should only make contact with this person one time.
• Creditors cannot threaten to take legal action that cannot be legally taken or that is not intended to be taken. For example, in Wisconsin, a creditor cannot threaten to garnish wages or take your property unless the creditor already has a judgment against you and then only if Wisconsin law would allow them to do that.
• Creditors may not use false representation or deceptive means to collect a debt or obtain information about you.
• If you have hired an attorney regarding your debt, the creditor, upon notification of this information, must not communicate with anyone other than the attorney.
• If you notify the creditor in writing that you refuse to pay the debt, or that you wish the debt collector to stop all further communication with you, the debt collector must stop communication.  The exception is that the debt collector can notify you of further collection remedies that they intend to take (this is true only if the creditor is a third party and not the original creditor). It is a good idea to send this written notification by certified mail with return receipt requested.  Keep a copy of the letter you mail to the creditor.  Attach the return receipt that indicates by date and signature that the creditor is in receipt of your letter.
• A debt collector cannot accept a postdated check that is postdated for more than five days, unless you are notified in the following ways: they must notify you in writing of the day they intend to cash the check and they must make that notification between three and ten days before they cash  the check.
• Debt collectors cannot threaten to harm you or hurt your reputation. For example, a debt collector cannot threaten to publish your name in the paper as a debtor.
• Debt collectors cannot force you to accept collect phone calls.

What Debt Collectors Must Tell You

• You have the right to know what account the debt collector is collecting on.
  During the initial contact with you, the debt collector must tell you for whom they are collecting the debt.
• The debt collector must tell you that you have the right to disagree if you believe you do not owe the debt. If you dispute the debt, the debt collector must investigate the matter. The collection agency cannot continue collection efforts until it proves that the debt belongs to you.
• You should receive a letter stating that the debt is now being collected by a third party. You have 30 days from the date of that letter to dispute the debt.  If the first communication with you is by phone, the debt collector must send you a letter explaining your rights within five days of that phone call.