We’ve all heard horror stories about debt collectors going to extremes. Many agencies call debtors multiple times a day, pretend to be family members to get the person to answer their phone at work, and leave obscene and harassing voice messages. Some collectors even tell their victims that failure to pay a debt is a criminal offense when in reality the collection agency is the one breaking the law.
What is the Fair Debt Collection Practices Act?
The Fair Debt Collection Practices Act, or FDCPA, is a consumer protection law that was passed on September 20, 1977, after aggressive debt collector actions were connected to a steady rise in consumer bankruptcies. It imposes guidelines on how third-party debt collectors may communicate with consumers and prohibits the use of deceptive and abusive business practices.
What is a Third-Party Debt Collector?
A third-party debt collector is not an original creditor, such as a bank, hospital, or car dealership. Instead, it collects debts on behalf of others. The U.S. Court of Appeals for the Third Circuit recently held that the FDCPA also applies to debt buyers who purchase portfolios of old or non-performing accounts and attempt to collect them.
Although the FDCPA does not apply to original creditors, state laws like the North Carolina Debt Collection Act apply to any person or entity engaged in debt collection from a consumer, including original creditors.
What Debts Are Covered by the FDCPA?
The FDCPA covers personal consumer debts, such as credit cards, mortgages, auto loans, and medical bills. It does not apply to business obligations.
What Conduct is Illegal Under the FDCPA?
The FDCPA prohibits actions designed to harass, abuse, and/or deceive a consumer into paying a debt. Examples include:
Using profane and obscene language on the phone or in voicemails.
Calling a consumer outside the hours of 8:00 am to 9:00 pm in the consumer’s time zone.
Contacting a consumer who is represented by an attorney regarding the debt. This can apply to debts included in an earlier bankruptcy.
Calling a consumer at work when the collector knows that the employer prohibits such calls.
Failing or refusing to notify the credit reporting agencies that the consumer has disputed a debt.
Threatening legal action they have no intention of taking, such as claiming that a lawsuit will be filed that day if the consumer doesn’t make a payment arrangement.
Continuing to call or send letters after the consumer refuses to pay or sends a written cease communications notice. The only exception to this rule is informing the consumer that collection attempts are ceasing or the agency is commencing litigation.
Additionally, the FDCPA requires debt collectors to:
Identify themselves in every communication with a consumer
Provide the name and address of the original creditor
Verify the debt
Notify the consumer of their right to dispute the debt
An aggressive and overzealous debt collector may tell you that as long as you owe a debt, they can take all measures necessary to collect it. The law states otherwise. Any collection agency found guilty of violating the FDCPA can be ordered to pay you $1,000 per violation and cover your court costs and attorney’s fees. They also risk governmental sanctions. For example, the Consumer Financial Protection Bureau fined a collection agency five million dollars last June for various violations of the FDCPA.
Contact a North Carolina Consumer Protection Attorney
Even if you owe a debt, you have rights that protect you from unfair and unconscionable collection tactics. If you are being harassed by a third-party debt collector or original creditor, contact Blossom Law PLLC, for advice and assistance, which may include filing a lawsuit on your behalf. For more information, call (704) 271-9078.