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Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is a federal law that regulates collection activities for collection agencies, collection attorneys and in-house collection by the creditors. The FDCPA is designed to eliminate unfair, abusive or deceptive practices, including over-charging, harassment, and disclosing consumers' debt profile to third parties by the debt collectors. It applies to credit raised for personal, family, and household purposes.

If you are using credit from any sources such as credit card, personal loan, home mortgage, auto finance, utility company and grocery shop etc. then you are a debtor and are responsible for repayment of this loan. But due to bad credit you are unable to repay loan in time. In this situation FDCPA ensures that debt collectors treat you fairly and prohibits them from using derogatory methods of debt collection. However, the act does not provide any relief in terms of the money you need to repay to the creditor. It only ensures that while collecting the money from you, the debt collectors or creditors behave fairly with you.

According to the Act, the term “debt collector" means any person, other than the creditor, who regularly collects debts or attempts to collect, directly or indirectly consumer debts asserted to be owed to another person. The term also includes collection agencies and collection attorneys.

Consumer’s rights under the FDCPA

The major consumer’s rights under the FDCPA are:
  • Rights regarding how debt collectors can contact you
    • You may be contacted in person, by mail, telephone, telegram or fax. However, the debt collectors cannot contact you at inconvenient times and places such as before 8 a.m. or after 9 p.m. (your time) unless you agree.
    • While contacting you over the phone, the debt collectors must identify themselves to you.
    • You may not be contacted at work if the debt collectors know that your employer disapproves of such contacts.
  • The debt collectors must contact your attorney, if you have one. They may contact other people only to obtain your contact details (residential or workplace). But, they are usually prohibited from telling anyone other than you and your attorney that you owe money.
  • Debt collectors may not harass, use threats of violence, abuse, use obscene language, or oppress you or any third party they contact for debt collection.
  • You can ask the debt collectors, in writing, to stop contacting you and they may not contact you after that except to inform you that they will not contact you in the future or that they intend to take some specific steps against you such as legal actions.
  • Debt collectors may not lie when collecting debts, such as falsely implying that they are government representatives or they work for credit bureau or that papers being sent to you are legal forms when they are not or that you have committed a crime.
  • Debt collectors may not misrepresent the amount of your debt, cannot state that you may be arrested if you do not clear your debt, cannot state that they will attach, seize, garnish or sell your property or wages, unless they intend to do so in compliance with all applicable laws.
Bad credit is like bad whether; it may not remain forever. It is just a bad phase in your financial life. If you have a bad credit, make sure you understand your rights under FDCPA and insist on fair and good behavior by debt collectors.

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