The Fair Debt Collection Practices Act (FDCPA) is a federal statute enacted to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act provide guidelines on how debt collectors and/or their representatives may conduct business. FDCPA defines rights of consumers against debt collectors, and prescribes penalties and remedies for violations of the Act.
The Act's definitions of "consumers" and "debt" specifically restricts the coverage of the act to personal, family or household transactions. Thereby, exempting debts owed by businesses from the regulations of the FDCPA
The FDCPA defines a debt collector as "any person who uses any instrumentality of interstate commerce or the mail in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." Although, they are collecting their own debts , many courts have generally found debt buyers to be regulated by the FDCPA. The FDCPA itself contains numerous exceptions to the definition of a "debt collector." Attorneys, originally exempted from the definition of a debt collector, have been included
The FDCPA requires debt collectors to Identify themselves and notify the consumer, in every communication, that the communication is from a debt collector, and in the initial communication that any information obtained will be used to effect collection of the debt.
The debt collector must give the name and address of the original creditor upon the consumer's written request made within 30 days of receipt of notice. Also, they must notify the consumer of their right to dispute the debt, in part or in full, with the debt collector. Upon request of the consumer they have to provide verification of the debt. And, if a consumer sends a written dispute or request for verification within 30 days of receiving the notice, then the debt collector must either mail the consumer the requested verification information or cease collection efforts altogether.
Certain types of "abusive and deceptive" practices are strictly prohibited when attempting to collect debts. Such prohibited conduct are:
- Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time; Failure to cease communication upon request;
- Communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted;
- Causing 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;
- Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer
- Contacting consumer known to be represented by an attorney;
- Using abusive racial or profane language in the course of communication;
- Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer's spouse or attorney).
Other conduct that is prohibited involves: Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer; Publishing the consumer's name or address on a "bad debt" list; Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law; Threatening arrest or legal action that is either not permitted or not actually contemplated; Reporting false information on a consumer's credit report or threatening to do so in the process of collection.
The Federal Trade Commission has the authority to administratively enforce the FDCPA. Consumers may also file a private lawsuit in a state or federal court to collect damages (actual, statutory, attorney's fees, and court costs) from third-party debt collectors. The FDCPA is a strict liability law, which means that a consumer need not prove actual damages in order to claim statutory damages of up to $1,000 plus reasonable attorney fees if a debt collector is proven to have violated the FDCPA. A debt collector may escape penalty if it shows that the violation was unintentional and the result of a "bona fide error" that occurred despite procedures designed to avoid the error at issue.
Any consumer who believe they have been a victim of unfair or illegal debt collection tactics should consult with an attorney.