Know Your Rights: Don’t Succumb to Unfair Debt Collection Practices

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debt collectionEarlier this month, the new Consumer Financial Protection Bureau vowed to crack down on unfair debt collection practices. The announcement followed on the heels of a fine levied by the FTC against a debt collection agency for its unfair and illegal practices. Between the record fine of $3.2 million, and the announcement that the CFPB is about to get really serious about cracking down, it’s even more important than ever that consumers know their rights as debtors.

While the argument can be made that those in debt should repay what they owe, it also doesn’t seem right that those in debt should be subjected to harassment. In some cases, debtors are trying to put together a plan to pay down debt, and the constant nagging from debt collectors doesn’t help.

If you are in debt, and collectors are starting to hound you, know your rights under the Fair Debt Collection Practices Act (FDCPA).

Your Rights under the FDCPA

First of all, it’s important to note that, for the most part, the FDCPA applies to third party debt collectors. First part debt collectors (your creditors) can bend some of the rules a bit when it comes to trying to get back what they owe. However, once the account is turned over to collections, things change a little bit. A collection agency is restricted in what it can do in the quest to encourage you to make good. Here are some of the things you should know about your protections:

  • Debt collectors cannot call before 8 am local time or after 9 pm local time — unless you give them permission. This means no early morning or late night calls.
  • Your debt should not be discussed with others; only you or your designated representative should be in the conversation about your debt. While debt collectors can ask others for information about your whereabouts and how to reach you, they can’t talk about your debt to them.
  • If you tell debt collectors that personal calls are not allowed at work, they have to refrain from contacting you at your place of employment.
  • You can ask debt collectors to stop contacting you. You have to do it in writing. Once you do, they have to stop trying to get you to pay your debt in this way. Send the request certified mail so you know the agency received it. After getting this notice, the collection agency can contact you only when ready for legal action.
  • You have the right to tell debt collectors to work with your representative/attorney rather than contact you.
  • Debt collectors shouldn’t lie about who they are to get you to come to the phone, or lie and say you can be arrested for debt (you can’t be).
  • Debt collectors are’t supposed to threaten you or use profanity when talking to you. They can’t threaten to use legal measures to collect the debt unless they are actually preparing to initiate these methods.
  • You have the right to receive a validation notice detailing what you owe, and who you owe it to. You can write a dispute letter if you feel the debt is not yours.

You have rights under the law. The CFPB is cracking down, and so is the FTC. You can report violations to both of those agencies, and even sue debt collectors who violate the law.

(Photo: debomb1)

{ 4 comments, please add your thoughts now! }

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4 Responses to “Know Your Rights: Don’t Succumb to Unfair Debt Collection Practices”

  1. dmosinee says:

    Good summary here.

    I’m fortunate enough to be debt-free, but I know second-hand how scummy those third party collectors can get. These vultures will do absolutely everything they can under the law — and often go beyond the law — to harass debtors; so debtors should not feel any “moral” pressure to stand up for their full rights in return.

    Creditors love to break out the crocodile tears and get all boo-hoo about defaults and “decaying moral fabric”, but they know perfectly well that their bean-counters have already built expected defaults into their business plans / interest rates. No one held a gun to their heads and forced them to loan that money or issue that card.

    Just because someone has debts they can’t pay doesn’t mean they aren’t a human being, deserving of a shred of dignity and decency.

  2. Glenn Lasher says:

    Of course people should repay what they owe. Sometimes, though, that is not relevant to the quesiton. Debt collectors don’t always have valid information. They may have the wrong person, they may have been sold a bad debt, and so on. Just because someone is hearing from a debt collect should not trigger an assumption, on anyone’s part, that the person is a deadbeat.

  3. Kerry Evans says:

    I fell on hard times once and owed a debt. Rather than avoid the collector’s phone calls I answered the phone in hopes that we could work out some sort of payment plan. They weren’t willing to take the amount I offered and insisted on a much larger payment than I could afford. I told the person on the phone that if I made that large a payment I would not be able to feed my child. The creditor told me that I should put my child up for adoption then. Come on really?!

  4. Susan says:

    Why don’t you name the debt collection agency that was fined?

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