When you’re dealing with debt collectors, it can feel intimidating, but federal law provides clear rules about how they must act and what they are forbidden from saying. The main law is the Fair Debt Collection Practices Act (FDCPA), which is enforced by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). This law protects you from abusive, unfair, or deceptive practices, making sure you are treated with fairness and respect.
Here is a simple, lay-man’s guide to what debt collectors can and can’t say or do when trying to collect a debt.
What Debt Collectors CAN Do and Say
Debt collectors have the legal right to try to collect a legitimate debt that you owe. However, their actions are heavily regulated.
They Can Contact You (Within Limits)
- Time and Place: Collectors can generally contact you between 8 a.m. and 9 p.m. in your local time zone.
- At Work (Unless Prohibited): They can call you at your job, but if you tell them (verbally or in writing) that you are not allowed to receive calls there, they must stop.
- Electronically (With Opt-Out): They can send you emails or text messages, but they must provide a simple and reasonable way for you to “opt out” or stop receiving those communications.
- Third Parties for Location: They can contact people you know (family, friends, neighbors, or employers) but only to find out your location information (home address, phone number, where you work). They can usually only contact each third party once and cannot mention that you owe a debt.
- Legal Action: They can file a lawsuit against you to collect the debt, provided the debt is not past the statute of limitations. If they win the lawsuit, they may be able to get a court order to garnish your wages or seize property (if allowed by state law).
- Report to Credit Bureaus: They can report accurate information about your debt to credit reporting companies.
Required Disclosures
Within five days of their first contact with you, a debt collector must send you a written “validation notice” that includes:
- The amount of the debt.
- The name of the current creditor.
- A statement that you have 30 days to dispute the debt in writing.
- What to do if you believe you do not owe the debt.
What Debt Collectors CAN’T Do and Say (Illegal Actions)
The FDCPA strictly prohibits debt collectors from using abusive, unfair, or deceptive tactics.
Harassment and Abuse
Collectors cannot harass, oppress, or abuse you or anyone else they contact. This means they cannot:
- Use Obscene Language: Swearing, profanity, or other abusive language is strictly forbidden.
- Threaten Violence: They cannot threaten to harm you, your reputation, or your property.
- Make Excessive Calls: They can’t call you repeatedly or continuously with the intent to annoy, abuse, or harass you or the person answering the phone. They are generally limited to no more than seven calls per week for a specific debt.
- Publicly Shame You: They cannot publicize your debt in any way, such as posting about it on social media for others to see, or sending postcards that reveal you owe a debt.
False or Misleading Statements
Debt collectors are banned from using any false, deceptive, or misleading representations. They cannot pretend to be something they are not, or misrepresent the facts of your situation. This includes:
- Falsely Claiming to be an Attorney or Government: They cannot say they are a lawyer or a representative of the government or a law enforcement agency (like a sheriff or police officer).
- Falsely Threatening Arrest or Imprisonment: They cannot tell you that you will be arrested or put in jail if you don’t pay your debt.
- Misrepresenting the Amount Owed: They must state the correct amount of the debt. They cannot try to collect more than you owe, including any extra fees or interest, unless the original contract or a law specifically allows it.
- Threatening Actions They Can’t Legally Take: They cannot threaten to sue you if the debt is past the statute of limitations, or if they have no actual intention of following through with a lawsuit.
- Falsifying Documents: They cannot send you documents that look like official court papers if they aren’t.
- Claiming Nonpayment is a Crime: They cannot tell you that you have committed a crime by not paying your debt.
Unfair Practices
Certain actions are considered fundamentally unfair and are prohibited:
- Discussing Debt with Third Parties: They cannot discuss the details of your debt with anyone other than you, your spouse, your parents (if you are a minor), your guardian, executor, or administrator.
- Depositing Post-Dated Checks Early: They cannot accept or threaten to deposit a post-dated check (a check dated for a future date) before that date, without proper notice.
- Threatening to Seize Property Illegally: They cannot threaten to take or garnish your wages, bank account, or property unless they have a court order or a legal right to do so (and intend to proceed).
What You Can Do
You have the power to control how collectors contact you.
- Request They Stop Contacting You: You can tell a debt collector to stop contacting you entirely by sending them a written “cease and desist” letter (send via certified mail and keep a copy for proof). Once they receive it, they can only contact you one more time to tell you they are stopping their efforts or that they plan to take specific legal action.
- Dispute the Debt: If you don’t think you owe the debt, dispute it in writing within 30 days of the first contact. They must stop collection activities until they provide written verification of the debt.
- File a Complaint: If you believe a debt collector has violated your rights under the FDCPA, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC).
- Seek Legal Help: You can also sue a debt collector in state or federal court for violations. If you win, the collector may have to pay your actual damages, statutory damages of up to $1,000, and your attorney’s fees.
Knowing your rights under the FDCPA is the best way to protect yourself from illegal and stressful collection practices. The debt collection industry is highly regulated now, but when I started, it was still the “Wild West”. Many calls were not recorded, and there were many things said that shouldn’t have been in order to intimidate debtors. Now, almost all calls are recorded and can be held against an unlawful debt collector should you choose to pursue legal action if they break the law!
