If you’re struggling to pay your bills, it’s likely a debt collector has contacted you. If so, you know it’s generally not a pleasant experience, and it typically leaves you frustrated and anxious. But there are times when debt collectors cross the line, and it’s important to know appropriate debt collection practices so that you can stand up against unfair treatment.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair or deceptive debt collection practices.
A debt collector is someone who regularly collects debts owed to others, which includes collection agencies, lawyers who collect debts on a regular basis and companies that buy delinquent debts and try to collect them.
Here are some debt collection FAQs from the Federal Trade Commission to help you understand and identify fair and unfair debt collection practices [Source: http://www.ftc.gov].
The Act covers personal, family and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.
No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.
If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people — but only to find out your address, your home phone number and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse or your attorney.
Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money and how to proceed if you don’t think you owe the money.
If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
Harassment. Debt collectors may not harass, oppress or abuse you or any third parties they contact. For example, they may not:
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
Debt collectors also are prohibited from saying that:
Debt collectors may not:
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
Yes. If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. Equally important, a debt collector may not apply a payment to a debt you don’t think you owe.
If you don’t pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.
Many federal benefits are exempt from garnishment, including:
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.
If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
Report any problems you have with a debt collector to your state Attorney General’s office and the Federal Trade Commission. Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.
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