Collection Laws: What You Need to Know
Americans are in $905 billion of credit card debt. In fact, the finance site estimates that each American household owes approximately $15,000 in credit card debt.
Now, for the average person, this is concerning. But for debt collectors, this is music to their ears. We’re all familiar with debt collectors calling our phones at all hours of the day or night to collect money.
What most people don’t know is that the Fair Debt Collection Practices Act exists to protect consumers from harassment by debt collectors. If you’re unfamiliar with collection laws, read our article to learn your rights.
The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is a federal law created by the Federal Trade Commission. The Act regulates debt collection agencies, buyers, and lawyers. The Act prohibits debt collectors from using deceptive acts to collect money from you.
The FDCPA covers all personal debts such as mortgages, loans, and credit cards. However, it does not protect you from business-related debt. The Act also doesn’t protect you from your original creditor.
For example, if you owe the bank money, the bank can contact you at their discretion. If they sell your debt to a collection agency, the agency is prohibited from contacting you at random hours. Therefore, getting a phone call from a debt collector at 11:30 pm at night is illegal.
You can also stop all communications from a debt collector by writing a formal letter.
Can a Debt Collector Harass Me?
By law, a debt collector is prohibited from using any vulgar, inappropriate or offensive language to communicate with consumers. If a creditor has been leaving threatening voicemails on your phone, you can use the FDCPA as grounds for a lawsuit.
Debt collectors are forbidden from contacting you while at work. They can’t leave a message with your employer or family member, either. Once you explicitly tell them to stop contacting you through a letter, and they persist, they are breaking the law.
How Much Do You Really Owe?
The FDCPA also forbids debt collectors from collecting more than you originally owed on the debt. You should ask the collector to provide information from the original creditor showing the creditor’s name, address, the amount owed, and your right to dispute the debt.
Often times, debt collectors buy unpaid debts from creditors for pennies on the dollar. The debt collector does not receive any of the original paperwork you signed with the creditor. Usually, they will have a hard time producing the original forms you signed.
The debt-buying process isn’t illegal, but it does make things more difficult for the collector to prove. That’s actually highly beneficial to you. You can demand the collector provide the original paperwork showing the contract you entered into with the creditor.
They have five days to produce the paperwork. If not, they must cease communication with you until they provide proof of the debt.
What Happens If It’s An Old Debt?
Most debts are written off after seven years. You still owe the creditor, but the debt is no longer on your credit report. Many states have laws regarding bad debts, including contact with debt collectors.
You should research your state’s collection laws regarding old debts, and consult with an attorney if creditors keep harassing you.
Know Your Rights Regarding Collection Laws
At Manfred Sternberg and Associates, we assist consumers struggling with harassment from unruly debt collectors. We will help you learn your rights and seek justice against unfair treatment from debt collectors. Contact us today!