Frequently Asked Questions about Debt Collectors

According to the Federal Trade Commission, a debt collector is any company or person with the business purpose of collecting debts that are owed to others. Debt collectors may be collection agencies, companies that buy debts from other businesses and then attempt to collect the money, and lawyers who collect debts regularly. The FTC is a consumer protection agency that is responsible for enforcing the Fair Debt Collection Practices Act. Under this act, consumers are protected against collectors using abusive, deceptive or unfair practices in their efforts to collect money from you.

Here are some frequently asked questions about your rights under the Fair Debt Collection Practices Act, and about debt collectors in general:

What debt is covered under the Fair Debt Collection Practices Act? Basically all debts that are not incurred to run a business are protected under the Act. Personal, household, family debt on credit cards, automobile loans, personal loans, medical expenses and mortgages are all covered under the Act.

When and where can debt collectors contact you? Contrary to popular belief, debt collectors cannot contact you any time or any where! They can't contact you before 8am in the morning or 9pm at night, unless you've agreed to it. If you tell the collector in writing or verbally not to contact you at work, they are not allowed to call you there.

Can debt collectors contact someone else to collect the money from you? If you have an attorney, debt collectors are required to work through the attorney. If you don't have representation, the collector is allowed to contact your family or friends or work to find out your home phone number, address or where you work – but they are not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.

Can you stop a debt collector from contacting you? If you've spoken to the debt collector at least once to find out what they're looking to collect on, regardless of the circumstances you can request that they only contact you by mail rather than by phone. Send a letter by certified mail (keep a copy) and pay for a return receipt. Once the collector has the letter, they may not contact you except to tell you they are filing a lawsuit in an effort to collect the debt.


What information does the debt collector have to tell you about the debts? Debt collectors are required to send you a written validation notice with the amount of money you owe within 5 days of contacting you to collect the debt. It should include the name of the creditor to whom you owe the money and what to do if you don't think you owe it.


Can your bank account or wages be garnished by a debt collector? With a judgment against you in court, if the collector wins they can garnish your wages or set up a direct payment from your bank account to pay towards your debts. For federal student loans, no court judgment is required to begin wage garnishments, and they can even take any tax refund you have coming to you.



What practices are debt collectors not allowed to use in their efforts to collect a debt? The Fair Debt Collection Act prohibits certain activities for debt collection, including:

Harassment: a collector can not harass, abuse or oppress you with threats of violence or harm, through obscene or profane language, or repeatedly use the phone to annoy someone about a debt. They also cannot publish a list of names of people who are refusing to pay debts, except to report it to credit reporting agencies.

False Statements: a debt collector cannot use any false statements to pressure you into paying – they cannot claim to be attorneys or government representatives, cannot claim to work for a credit reporting agency, claim your debt is a crime if it isn't, or misrepresent the amount of money you currently owe. They cannot state forms they send you are legal if they're not, or vice versa. Prohibited Statements: collectors are prohibited from saying any of the following:

• You'll be arrested if you don't pay the debt
  
  
• Legal action will be taken against you (if they don't intend to take action or if doing so would be illegal)
  
  
• Your wages will be garnished or seized unless they are permitted by law to take that action AND they intend to do it
  
  
• Your property will be sold and proceeds used to pay the debt unless they are permitted by law to take that action AND they intend to do it
  
  
  
  

Unfair Practices: collectors may not engage in unfair practices such as trying to collect more than what you owe in interest or fees, unless your state law allows those charges, cannot deposit a post-dated check before the date indicated on the check, and cannot contact you by postcard.

Is there anything you can do if you think a debt collector has violated the laws under this Act? If you believe a debt collector violates the laws of this act, you can sue the collector in state or federal court within a year of the date the law was violated. If you can't prove that you've suffered actual financial damages, the judge can require the collector to pay you $1,000 and to reimburse you for attorney fees and court costs. If you have proof that the collectors actions were illegal and cost you financially, they can be ordered to pay you for those actual damages. Keep in mind that even if the debt collector violates the law when trying to get the money they are owed, the debt is still owed and doesn't go away.

Information: Debt collection and credit: www.ftc.gov/credit and MyMoney.gov

File a complaint: Ftc.gov or call 1-877-FTC-HELP

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