You and the Law: Fair Debt Collection

You and the Law: Fair Debt Collection

By Southern Arizona legal Aid, Inc.

Debt collectors cannot treat you unfairly because you owe an unpaid debt. In 1978, the U.S. Congress enacted the Fair Debt Collection Practices Act (FDCPA) to stop abusive, deceptive and unfair debt collection practices.

This Act applies to "consumer debts". This means personal and household debts and does not apply to business debts. Also, the Act applies only to "debt collectors" and not to "creditors". The "creditor" is the person or entity to whom the money is owed. The "debt collector" is someone other than the creditor who attempts to collect the debt for the creditor.

When Debt Collectors Contact You

• They must not call you at a time or place they know or should know to be inconvenient for you. Unless you tell them otherwise, they must call you between 8:00 a.m. and 9:00 p.m. at your local time.
• If they know you have a lawyer representing you regarding the debt they are collecting, they must contact your lawyer and not contact you directly.
• They must not call you at work if they know or have reason to know that your employer does not allow this. If you are called at work, tell the collector, or have your boss tell them, they must not call you at work again. Then, if they do, simply refuse to speak to them. Also, keep a record of calls made by a collector after they have been told not to call at work.
• They must not communicate with you by postcard.

The FDCPA is intended to protect your privacy. In most cases they cannot contact anyone other than you to try to collect the debt. This means they cannot call, for example, your family members, friends, former or present employers, etc., to say that you have not paid your debts.

Debt Collectors can contact third parties to get information about your whereabouts, if they do not know it. This is called "location information". When they are calling third parties to get "location information", they must not:

• Say that you owe any debt.
• Call that person more than once unless that person asks to be called again or the collector reasonably believes the earlier response of the third party was wrong or incomplete and the third party now has complete or correct information.
• Communicate by postcard.
• Use any language or symbol that indicates that the communication relates to the collection of a debt or that the sender is a collector.

Disclosure Which Must Be Given to You by Debt Collectors

Debt Verification: Within 5 days of the collector's first communication with you, they must send you a written notice containing:

• The amount of the debt.
• The name of the creditor to whom you owe the debt.
• A statement that within 30 days after you have received the notice you can dispute the validity of the debt or any portion thereof.
• A statement that if you notify them in writing within 30 days that you dispute the debt or any part of it, they will provide you with the verification of the debt. They must send you verification of the debt.
• A statement that if you request it in writing within 30 days of receiving the notice, the collector will provide you with the name and address of the original creditor if it is different from the present creditor.

Disputing the Debt

If you dispute the debt, send the collectors a letter stating that you don't owe the money and why. You should also send copies of receipts, canceled checks or other documentation. Keep your original documents in a safe place for future use. Send your letter within 30 days of the date you received the notice. It is best to send the letter by registered mail, return receipt requested.

Debt collectors must stop contacting you until they mail you the verification of the debt. If they are unable to verify the debt, they must stop collection procedures.

Warning Notice

Collectors must give you the following notice on their first communication to you.

"This is an attempt to collect a debt and any information obtained will be used for that purpose."

After the first communication, a collector need only disclose that they are a debt collector. Failure to provide this notice is a false, deceptive or misleading means of collecting a debt.

Deceptive Collection Practices

Debt collectors cannot make false statements in order to try to get you to pay the debt. Deceptive collection practices include:

• Falsely stating the amount, type or legal status of a debt.
• Falsely stating an amount owed for the collector's services in collecting from you, or trying to get you to pay for collect calls and telegrams.
• Falsely stating or suggesting that they are a lawyer or are represented by a lawyer.
• Stating or suggesting that you can be arrested for not paying a debt, or that you have committed a crime, or saying anything intended to state that you are or will be publicly disgraced.
• Stating that legal action, such as a lawsuit, will be taken against you, when they really do not intend to do so, or falsely telling you that real lawsuit papers are not really a lawsuit and don't require any action by you.
• Stating or suggesting that they will seize your wages or property unless the law allows that and the creditor actually intends to do so.
• Threatening to do anything that is not legal or which they do not really intend to do.
• Providing or threatening to provide false information about you to anyone, including a credit bureau, including the failure to communicate that the debt is disputed.
• Using any written materials which falsely appear to be issued or approved by a court or governmental entity, or which in any way create a false impression of the source, authorization and approval of the written materials.
• Using a false name or falsely claiming that they own, operate or work for a credit bureau.

Post dated checks -- collectors may ask you to send post-dated checks for future payments. We do not recommend that you do this. In any event, do not send post dated checks unless you are sure there will be enough money in your account to cover the check on the date you dated it for. Otherwise, you are subjecting yourself to criminal liability for writing a bad check. If you do send post-dated checks, the collector must not deposit the check before the date you have written on it. Also, the collector must give you 3 to 10 business days' notice before depositing the check.

Harassment or Abuse

Debt collectors cannot threaten, abuse or oppress you while tying to collect a debt. Examples of prohibited conduct are:

• Threats of violence or other criminal means to physically harm you, your reputation, or your friends and acquaintances.
• Publishing your name (except to credit bureaus) alone or on a list of consumers they claim refuse to pay debts.
• Advertising that they are trying to sell your debt in order to coerce you to pay it.
• Calling continuously, whether you speak to them or not, with the intent to annoy, abuse or harass any person in the household.
• Calling you and refusing to tell you their identity and the name of the agency they are calling from. 

What Can You Do?

Try to Settle the Account. Call or write to the collection agency and explain that you are unable to pay the requested amount. Try to arrange a payment schedule that will work for you. If you and the collector reach an agreement, be sure to get it in writing from the collector.

If this doesn't work, or if you simply are unable to pay anything, try the following:

• Document Everything
• Make a diary of collection contacts, including date, time, name and content.
• Save all collection notices you receive to document violations in the notices as well as the dates on which they were sent.

 Seek Legal Advice

Seek legal advice about the collector's conduct and what you should do in response. The Fair Debt Collection Practices Act gives you the right to sue collectors who violate the Act. Whenever you have debt problems, it is also a good idea to get legal advice about bankruptcy or other legal alternatives to handling difficult debt situations.

Request that Collectors Stop Contacting You

You can send a letter to request that collection agencies stop contacting you. 

Debt collects are required to honor this request. After the collectors receive this letter, they may only contact you once more to indicate they received your letter, or that they intend to pursue legal remedies. After that, they can no longer contact you.

Creditors can, of course, still sue you to collect the debt. How this affects you will depend on your circumstances. Some people do have property, which creditors can take, and you should seek legal advice regarding this.

Remember - You do not have to talk to debt collectors when they call you. You can either not answer the phone, or you can hang up after you realize who it is. Also, you do not have to allow debt collectors into your home. You can call the police and have debt collectors arrested for trespassing if you tell them to leave and they refuse.

Complain to the Federal Trade Commission

The FTC monitors and regulates unfair debt collection practices by collection agencies. Write to them, outlining the violations of the Fair Debt Collection Practices Act committed by the collectors, and ask them to investigate. Send a copy of this letter to the collection agency. This letter will advise debt collectors that you have reported their violation(s) of the Fair Debt Collection Practices Act.  For more information about the Fair Debt Collection Practices Act and your rights, contact the Federal Trade Commission at:

FTC Headquarters

6th & Pennsylvania Avenue, NW

Washington, D.C. 20580

(202)326-2222; TDD (202)325-2502

In Arizona contact:

Arizona Attorney General

Consumer Protection

1275 W. Washington

Phoenix, Arizona 85007 (602)542-5763

400 West Congress, Building S, Suite 215

Tucson, Arizona 85701-1720