Fair Debt Collection Practices Act
by Ellise Walsh

Few of us keep up with the many federal regulations that go on the books each year but many of them are passed for out protection so it pays to stay informed. The Fair Debt Collection Practices Act is a good piece of legislation to keep up on because it is there to protect you from debt collation agencies in that circumstance, hopefully rare, where a creditor is using such agencies to collect the money you owe them on credit.

The FDCPA is used extensively in cases where military personnel need help with collection agencies and as often happens, a law passed to protect them benefits us as well. The law was actually passed by congress in 1978 and it provides for a number of significant protections you should be aware of when the situation arises that a debt collection agency begins to make contact with you.

One provision of the FDCPA that is most often not observed is the notification provision. By law, the collector must notify you of your rights at the moment of first communication or within five days of that first contact. If you do not receive that notification that specifically mentions the Fair Debt Collection Practices Act and the rights you have that we are summarizing in this article, you should notify the debt collection agency that they are in violation of federal law and notify the attorney general.

Within that notification, the creditor must inform you that you have the right to dispute the debt for 30 days past the point of notification. A very important right that you have during that 30 days is that if you notify the creditor in writing that you are disputing the debt, and then the creditor must by law cease debt collection until the dispute is resolved. So the key to stopping the collection activity is to get that written notification on its way as quickly as possible.

Do not cut corners on this notification. Prepare the notification on paper, do not email it. It would not be completely out of the question to have it notarized. Then send it by fastest way, next day service and have it certified so that the creditor must sign for the receipt of the notice and that signed form comes back to you so you have a legal document showing they were notified. Do not deliver it yourself or hand it to a creditor or someone who might take it to them. Using the mail gives you those additional legal verifications.

The FDCPA is quite detailed in the number of things that it prohibits a debt collector to use as collection tactics. You should be well informed and “armed”, if you will, so if these activities take place, you have rights under federal protection to take action. Included in those protections are:

• Phoning a debtor's parent

• Impersonating a government prosecutor, and requesting the parent to get the debtor to call about a criminal investigation regarding the debtor

• Calling [five to fifteen] neighbors in a brief period of time, informing them that the debtor was suspected of receiving stolen goods, and asking them to go to the debtor's home and request the debtor to call the collector

• Threatening the debtor and his parent with criminal charges for capital gains tax fraud unless the balance of the debt was put on the parent's credit card

Probably one of the most significant rights granted under the Fair Debt Collection Practices Act is he right to terminate many future collection contacts. If you notify the debt collector that you wish for the debt collections to stop, they by law must stop them and at that point, their only recourse is to pursue the claim legally, by lawsuit. Knowing that so often these suits do not go well for the creditor or the cost of them does not justify the amount that might be collected, often the creditor will drop the debt and write it off so putting your rights to work is a strong defensive step because it could result in the debt being removed from your record entirely and so no longer be a problem.

Finally, additional rights under the FDCPA include:

• The right to stop contacts at work if the employer prohibits them

• The right to stop contacts by obtaining counsel, and The right to obtain verification of a disputed debt

You can see that in this case congress did a good job of empowering debtors and giving you some powerful tools to defend yourself against abusive collection practices. Be sure you know your rights and how to use them.



Credit Counseling & Debt Settlement—We’ve also written articles about these alternative forms of debt repayment. You may want to look into each of these to see which one is right for you and your current situation.

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