FDCPA was enacted with the main purpose of eliminating abusive practices in debt collections, promote fair debt collection practices, provide avenue for disputing errors & obtain validation of debt information for ensuring accuracy of information.
Guidelines have been specified in the act under which debt collectors have to conduct their business, and it also defines the penalties & remedies if the act is violated.
Who are covered by FDCPA?
Debt collectors use different names such as factoring company, collection agency and other similar name to claim immunity from the Act. But debt collectors have been broadly defined as persons who make use of instrumentality of interstate commerce in any business, where the principal purpose is collection of debts. It is also applicable to persons who collects or attempts to collect, debts owed or due or which are asserted to be due or owed.
One important thing worth mentioning is that definition of “debt” and “consumers” is limited to cover personal & non-commercial transactions only. So those debts owed by businesses are not regulated by FDCPA.
According to FDCPA, certain type of “deceptive & abusive” conduct while attempting to collect debts is strictly prohibited. Let us now go through the specifics mentioned in the Act to this regard.
Prohibited conduct
- Contact consumer where they are work/are employed – If consumer has told in writing or verbally, then it would be violation of the act to contact consumer at his place of employment.
- Contact over phone – Debt collector can only contact between
- Reporting incorrect information – Reporting incorrect information or threatening to do so, on consumer’s credit report in the process of collection is prohibited under FDCPA.
- Misrepresentation – Using deception to collect debt or misrepresent debt including misrepresentation that debt collector is a law enforcement officer or attorney is against FDCPA norms.
- Threatening legal action – To threaten arrest or legal action which is not permitted or which collector does not actually contemplate doing is prohibited according to the act.
- Use of abusive language – In the course of communication with relation to the debt, a debt collector cannot use profane or abusive language.
- Contacting third parties – Discussing or revealing consumer’s nature of debt with third parties or threaten to do so. But debt collector can discuss with consumer’s attorney or spouse.
In our next article on FDCPA we will look into how FTC enforces the regulations mentioned in this act as per the powers it has as per the Federal Trade Commission Act. Other important section that will be worth reading will be on the required conduct by debt collectors as per FDCPA.
Readers can enhance there knowledge about FDCPA by going through this following page which elaborately describes all the sections of this Act –
[http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm ]
This entry was posted on Tuesday, September 11th, 2007 at 9:41 am and is filed under Debt, Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
I HAD BEEN CONTACTED BY A DEBT COLLECTOR NOW WE WERE TRYING TO SEE IF MY HUSBAND WOULD QUALIFY FOR A HARDSHIP SO HE CAN MAKE MINIMUM PAYMENTS ON THIS ACCOUNT UNTIL HE CAN AFFORD TO MAKE BIGGER PAYMENTS SHE ASKED HIS JOB HISTORY I SAID HE WORKS PART TIME AND HAS BEEN FOR 5 YEARS SHE SAYS OH HE HAS BEEN THER FOR FIVE YEARS AND IS ONLY PART TIME? I SAID WHY IS THAT NESSACARRY TO SAY WHETHER HE HAS BEEN FOR 5 YEARS THAT HAS NOTHING TO DO WITH YOU SO THEN SHE SAYS OH WELL I SEE HE HAS A JUDEMENT ON HIS CREDIT REPORT THAT SHOWS HOW MUCH HE WANTS TO PAY THIS DEBT SHE SAID I DIDNT WANT TO COOPERATE AND TOLD ME TO HAVE A NICE DAY THEN HUNG UP. I CALLED BACK AND ASKED TO SPEAK TO HER SUPERVISOR AND SHE PUT SOMEONE ON AND I EXPLAINED THE SITUATION SO HE SAYS OK LETS SEE WHAT I CAN DO FOR YOU SO HE ASKED MY HUSBANDS INFO I TOLD HIM THEN HE SAYS OK HOW MUCH DO YOU MAKE I SAID THIS IS MY HUSBANDS DEBTS NOT MINE HE SAID IN ORDER TO SEE IF HE QUALIFIED FOR A HARDSHIP I HAD TO INCLUDE MY INCOME I TOLD HIM THAT THAT WAS INCORRECT AND THAT I WOULD NOT PROVIDE MY INFO BECAUSE IT HAD NOTHING TO DO WITH ME HE SAYS THE SAMETHING THE LADY SAID I SEE YOU DONT WANT TO WORK SOMETHING OUT GOOD BYE. I CALLED BACK AND ASKED THE OPERATOE TO GIVE ME THE ADDRESS OF THE COMPANY SHE TRANSFERED ME BACK TO HIM AND HE SAID I MAILED YOU A LETTER GOODBYE IF THIS IS MY HUSBANDS DEBT WHY ARE THEY TRYING TO INCLUDE MY INCOME? AND IS THIS LEGAL?