Millions of Americans are in some form of debt — and not all of them are willing to pay, even when they can. Every single day, hundreds of debt collection agencies contact debtors in an attempt to recover debt on behalf of their clients.
Most debt collection agencies play by the rules set out by state and federal laws. One of the laws that govern debt collection is the Fair Debt Collection Practices Act (FDCPA).
So what is FDCPA and how does it work?
The Fair Debt Collection Practices Act (FDCPA) is a federal law that came into effect in 1977 to protect consumers by imposing penalties on creditors and debt collection agencies who engage in unscrupulous practices. As the name suggests, FDCPA’s primary goal is to promote fair debt collection practices while eliminating abuse in the process.
Under FDCPA, a creditor or a debt collection agency has the right to recover legitimate debts. This means that they can send invoices and letters, call the debtor or hire a collection agency to recover the debts in question. This law also allows them to take legal action against the debtor if doing so can facilitate the recovery of the debt. However, FDCPA also restricts how creditors or debt collectors can go about their business.
What you cannot do when collecting debt
As a creditor or debt collection agency, you cannot call a debtor whenever you feel like it. Basically, you cannot call a debtor before 8:00 a.m. or after 9:00 p.m. (their time). Also, you cannot call a debtor at work if you know they are not allowed to answer personal calls while on the job. Finally, you cannot contact or attempt to contact the debtor at any location or time that you know is inconvenient to the debtor.
Other practices prohibited by FDCPA include the use of foul language, threatening or using violence, threatening to get the debtor fired from their job or disclosing the debt to third parties.
Debt recovery is a tricky business. Knowing your legal responsibilities is key to safeguarding your rights and interests while collecting a debt.