Fair Debt Collection
If you use credit
cards, owe money on a personal loan, or are paying on a home mortgage,
you are a "debtor." If you fall behind in repaying your creditors, or
an error is made on your accounts, you may be contacted by a "debt
collector."
You should know that in either situation, the Fair Debt Collection
Practices Act requires that debt collectors treat you fairly and
prohibits certain methods of debt collection. Of course, the law does
not erase any legitimate debt you owe.
This brochure answers commonly asked questions about your rights under
the Fair Debt Collection Practices Act.
What debts are covered?
Personal, family, and household debts are covered under the Act. This
includes money owed for the purchase of an automobile, for medical
care, or for charge accounts.
Who is a debt collector?
A debt collector is any person who regularly collects debts owed to
others. This includes attorneys who collect debts on a regular basis.
How may a debt collector contact you?
A collector may contact you in person, by mail, telephone, telegram,
or fax. However, a debt collector may not contact you at inconvenient
times or places, such as before 8 a.m. or after 9 p.m., unless you
agree. A debt collector also may not contact you at work if the
collector knows that your employer disapproves of such contacts.
Can you stop a debt collector from contacting you?
You can stop a debt collector from contacting you by writing a letter
to the collector telling them to stop. Once the collector receives
your letter, they may not contact you again except to say there will
be no further contact or to notify you that the debt collector or the
creditor intends to take some specific action. Please note, however,
that sending such a letter to a collector does not make the debt go
away if you actually owe it. You could still be sued by the debt
collector or your original creditor.
May a debt collector contact anyone else about your debt?
If you have an attorney, the debt collector must contact the attorney,
rather than you. If you do not have an attorney, a collector may
contact other people, but only to find out where you live, what your
phone number is, and where you work. Collectors usually are prohibited
from contacting such third parties more than once. In most cases, the
collector may not tell anyone other than you and your attorney that
you owe money.
What must the debt collector tell you about the debt?
Within five days after you are first contacted, the collector must
send you a written notice telling you the amount of money you owe; the
name of the creditor to whom you owe the money; and what action to
take if you believe you do not owe the money.
May a debt collector continue to contact you if you believe you do
not owe money?
A collector may not contact you if, within 30 days after you receive
the written notice, you send the collection agency a letter stating
you do not owe money. However, a collector can renew collection
activities if you are sent proof of the debt, such as a copy of a bill
for the amount owed.
What types of debt collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress, or abuse you or
any third parties they contact.
For example, debt
collectors may not:
- use threats of
violence or harm;
- publish a list of
consumers who refuse to pay their debts (except to a credit bureau);
- use obscene or
profane language; or
- repeatedly use
the telephone to annoy someone.
False statements.
Debt collectors may not use any false or misleading statements
when collecting a debt. For example, debt collectors may not:
- falsely imply
that they are attorneys or government representatives;
- falsely imply
that you have committed a crime;
- falsely represent
that they operate or work for a credit bureau;
- misrepresent the
amount of your debt;
- indicate that
papers being sent to you are legal forms when they are not; or
- indicate that
papers being sent to you are not legal forms when they are.
Debt collectors
also may not state that:
- you will be
arrested if you do not pay your debt;
- they will seize,
garnish, attach, or sell your property or wages, unless the
collection agency or creditor intends to do so, and it is legal to
do so; or
- actions, such as
a lawsuit, will be taken against you, when such action legally may
not be taken, or when they do not intend to take such action.
Debt collectors
may not:
- give false credit
information about you to anyone, including a credit bureau;
- send you anything
that looks like an official document from a court or government
agency when it is not; or
- use a false name.
Unfair practices.
Debt collectors may not engage in unfair practices when they try to
collect a debt. For example, collectors may not:
- collect any
amount greater than your debt, unless your state law permits such a
charge;
- deposit a
post-dated check prematurely;
- use deception to
make you accept collect calls or pay for telegrams;
- take or threaten
to take your property unless this can be done legally; or
- contact you by
postcard.
What control do
you have over payment of debts?
If you owe more than one debt, any payment you make must be applied to
the debt you indicate. A debt collector may not apply a payment to any
debt you believe you do not owe.
What can you do if you believe a debt collector violated the law?
You have the right to sue a collector in a state or federal court
within one year from the date the law was violated. If you win, you
may recover money for the damages you suffered plus an additional
amount up to $1,000. Court costs and attorney's fees also can be
recovered. A group of people also may sue a debt collector and recover
money for damages up to $500,000, or one percent of the collector's
net worth, whichever is less.
Where can you report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state
Attorney General's office and the Federal Trade Commission. Many
states have their own debt collection laws, and your Attorney
General's office can help you determine your rights.
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
www.ftc.gov or
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
complaints into
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
|
FEDERAL TRADE COMMISSION |
FOR THE CONSUMER |
1-877-FTC-HELP |
www.ftc.gov |
|
March 1999
|