Fair Debt Practices
This page will contain information about fair debt practices in the USA, United Kingdom and other countries. In addition we will add our own opinion about fair debt practises we have garnered in over 40 years of debt collection. The information might be anecdotal, the law or unusual.
The information about fair debt practices is for debtors, lenders, debt collectors, debt collection attorneys, and debt collection agencies. Use our menu to jump to specific section as this article is quite lengthy.
- Fair Debt Practices
- Defend Yourself with the Fair Debt Collection Act
- What Fair Debt Practices Means to You?
- Fair Debt Collection Practices: What to Expect from your Debt Collector?
- Fair Debt Practices Act: Dealing with Abusive Debt Collectors
- The Debt Collection Law: What You Need to Know if You are in Debt?
- The Debt Collection Law and Your Workplace
- The Debt Collection Law and your Health Care
- The Debt Collection Law and Identity Theft
- If You Are In Doubt About Fair Debt Practices
Defend Yourself with the Fair Debt Collection Act
In 1977, the United States’ congress passed the Fair Debt Collection Practices Act. Commonly referred to as the Fair Debt Collection Act, this law was drafted in order to provide guidelines, procedures and limitations to regulate the activities that are done in debt collection processes. Because of the Fair Debt Collection Act, debt collectors have refrained from using threats, lies or insults to harass and intimidate debtors.
In order to understand this act, you must first have an understanding of what a debt collector is. According to the Fair Debt Collection Act, a debt collector is someone who
“uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another”.US Government
To put it simply, a debt collector is someone who collects payments that debtors owe to another company. For example, you have a delinquent account with a credit card company. Once the credit company feels that too much resource is required to pursue you to make payments, it will hire a debt collector to pursue the payments for them.
Now that you understand what a debt collector is, you must also know what the debt collector’s job entails. The Fair Debt Collection Act details the information that your debt collector must give you. Remember, for the debt collection activity to be legitimate, you should first be supplied with documents that will help you understand the situation you are in.
Once the debt collector has contacted you, he has five days to provide you with the following:
1) The exact figures regarding that debt that you supposedly owe.
2) Information about the creditor that you owe the debt to.
3) The debt collector must tell you that you have a maximum of 30 days to raise your doubts or disagreements regarding the nature and specifics of the debt. If you do not dispute the debt, the collector assumes that the debt is valid and binding.
4) In case you claim that you have no debt, the debt collector must immediately send you documents and other certificates that will verify the debt.
5) Under the Fair Debt Collection Act, the debt collector should inform you that if you have switched creditors, you are allowed to ask for information regarding your original creditor.
As you can see, the Fair Debt Collection Act mandates that the debtor be given adequate details as well as ample time to evaluate them and raise whatever concerns he may have. If for some reason, the debt collector becomes aggressive and abusive, the Fair Debt Collection Act also gives the debtor the right to sue the debt collector.
However, the debtor must remember that the Fair Debt Collection Act of 1977 does not erase debts. It isn’t a get-out-of-debt ticket. It simply ensures that debt collectors will be able to do their work and solicit payments without violating the rights of the debtors.
What Fair Debt Practices Means to You?
So, you may have missed some payments on your mortgage. Or, you may have failed to respond to calls from your creditor. Despite the fact that you may have failed to keep your end of the contract, you still have the right to be treated fairly during the process of debt collection.
Fair debt collection involves the use of proper tools to evaluate your situation. It also gives you ample time to respond to the notification of the debt collector. In order to ensure that debt collection is carried out fairly, the congress passed the Fair Debt Collection Practices Act or FDCPA.
The FDCPA ensures that there are guidelines that will protect you when you communicate with a debt collector to settle your accounts. The act states that the debt collector cannot intimidate you with false threats. He cannot scare you into thinking that you will go to jail if you fail to make payments on time. He cannot insult your race or make any negative references to your gender. He is also not allowed to talk to you using obscene and profane language.
Fair debt collection also protects your privacy. This means that debt collectors are not allowed to tell other people about your debt. They cannot put you in a place of public shame and humiliation in order to pressure you into paying. If the debt collection process is to be fair, then it is only right that you and your debt problems remain private and personal. More importantly, fair debt collection gives you the right to sue your debt collector if you feel that he is being abusive, aggressive or dishonest.
Fair debt collection means that even though you have failed to make some payments, the debt collection agency will still respect you and value you as a client. This means that you are given the opportunity to approach your debt collector and request for a change of payment scheme. Once you show that you intend to pay, you are allowed to renegotiate the structure of your debt. You and your debt collector will come up with a payment scheme that you can afford. This is what fair debt collection is about; it gives you a legal environment in which you can come up with an effective way to settle your debt.
So, if you have debts, do not panic. The United States of America has put in the necessary legal safeguards that will allow you to coordinate with debt collectors without fear of harassment or abuse. You won’t be arbitrarily driven out of your home or anything like that. The FDCDPA ensures that there is a fair debt collection process that will respect your rights as an individual and a customer. In the end, fair debt collection should help reduce the stress and anxiety that are brought about by the entire process of settling a debt.
Fair Debt Collection Practices: What to Expect from your Debt Collector?
The best way to protect yourself from harassment is to know the exact job description of your debt collector. If you know the things that his job entitles him to do, you can keep better track of his behavior and take action when he violates your rights. To know the debt collector’s job description, you need to have a thorough understanding of the 1977 Fair Debt Collection Practices Act. This act literally outlines the Fair Debt Collection Practices. It tells you the practices that are acceptable for debt collectors. It also informs you of practices that are unacceptable under the eyes of the law.
So, according to the Fair Debt Practices, what are the debt collector’s responsibilities towards you?
Basically, the debt collector owes you information. If the debt collector is trying to get you to pay up, it is only right that you are fully informed of the circumstances surrounding your debt. This means that within five days of initial contact, the debt collector must send you a written document that contains information such as the amount of debt you owe and the company or institution you owe it to. The document should also let you know the steps to take in the event that you believe you do not have that debt and you should not be held responsible for it.
If you file a letter to dispute the debt, the debt collector will stop contacting you until he comes up with evidence that proves that you truly owe that money. As part of the Fair Debt Practices, the debt collector must send you a receipt to prove that he has received your complaint. Also, the debt collector has to mail any evidence that proves that you are responsible for the debt.
Fair Debt Collection Practices are aimed at protecting the debtor’s privacy. As such, if you wish to put a stop to the debt collector’s calls and visits, you must write a letter to indicate your intention. Once the debt collector confirms receipt of your letter, you can expect him to stop contacting you.
Aside from these things, the Fair Debt Collection Practices also forbid your debt collector to do the following:
1) Contact you via phone or make personal visits outside of the time period between 8:00 am and 9:00 pm.
2) Approach your family and friends in an effort to locate you.
3) Come to your workplace for the purpose of contacting you, verifying your employment or acquiring information regarding your salary.
Fair Debt Practices are exactly that – fair. It means that while you have individual rights, the law also provides guidelines to ensure that the debt collector can do his job well.
Fair Debt Practices Act: Dealing with Abusive Debt Collectors
In an effort to make you pay, some debt collectors may resort to unethical means. They may falsely threaten you with law suits or repossessions. They may call you incessantly or use derogatory language that will embarrass and humiliate you. However, these things don’t have to happen. The United States actually has a Fair Debt Collection Practices Act that protects individuals from the abusive behavior of debt collectors.
In the first place, why do debt collectors find it easy to violate the Fair Debt Collection Practice Act? Actually, the answer is quite simple. Debt collectors take advantage of people’s ignorance. If you don’t know the law and you’re not familiar with the provisions of the Fair Debt Collection Act, you won’t know what rights you have against these debt collectors. If the debtor is ignorant, the debt collector can manipulate him easily. Without the necessary information, debtors will not know how to fight back against debt collectors who harass him.
Another reason is that while abusive behavior is common, it may be hard to prove. Oftentimes, debtors have difficulty providing evidence that clearly shows that the debt collectors went beyond their limitations and violated the Fair Debt Collection Practices Act. In order to help your cause, it is advisable that you keep copies of every single document that you and your debt collector exchanged.
Lastly, the Fair Debt Collection Practice Act has several loopholes. So, if the debt collector makes some violations, he can simply close his office only to reopen later, under a new name.
Once you are sure that your debt collector violated the Fair Debt Collection Practice Act, here are the steps you should take:
1) Notify the debt collector of the violation you observed. In a formal letter, cite the provision of the Fair Debt Collection Practice Act that was violated. Include details of the event like the date, time, place as well as other circumstances regarding the violation. Make sure you ask for a receipt that proves that the debt collector has indeed received your complaint.
2) If you find it necessary, you can mail another letter to ask the debt collector to stop calling or visiting you.
3) File a formal complaint at the Federal Trade Commission or the FTC. The FTC is the body that is responsible for regulating the activities of debt collection agencies. Filing a complaint is easy, just log on to www.ftc.gov and you can accomplish an online form.
4) Go to your State Attorney General and report your debt collector’s abusive behavior. The Secretary General will have the case processed and investigated.
If you have enough evidence, approach your lawyer and consider filing a lawsuit against that collection agency.
Remember, the Fair Debt Collection Practice Act is there to support you. However, it is only useful when you have enough knowledge about it.
The Debt Collection Law: What You Need to Know if You are in Debt?
Under the Fair Debt Collection Practices Act (FDCPA), you are protected from the abusive actions of a debt collector. No matter how much the creditor wants his money back, he needs to follow the guidelines of this debt collection law. This law has special implications for you, your workplace and even your medical care.
The Debt Collection Law and Your Workplace
The debt collection law, specifically the FDCPA, specifies that a debt collector may contact your office only to inquire about your location, your home address as well as your contact information. This form of contact can only be done if the debt collector has no other means of locating your current residence.
Meanwhile, the debt collection law also gives the debt collector the right to send papers and documentation to your boss. These documents are files on your debt that are somehow related to your job and your salary. A common example is a court order that asks for details about your salary.
However, the debt collector is not allowed to volunteer any information regarding your debt. The debt collector may only share this information if your boss asks for it, or if he is asking your boss to answer certain paperwork that is related to your debt. While the debt collector may not share the details of your debt, your employer may have other ways of obtaining such information. Usually, records of your debt may appear on your credit rating. Since your employer is allowed to view this information, he may learn about your debt.
The Debt Collection Law and your Health Care
Unpaid medical bills are a huge concern for creditors and their collection agencies. If you fail to settle your medical bills, your healthcare provider may turn over your account to a collection agency. However, the debt collection law and the law concerning medical bills indicate that you must first agree to such a transaction before a collection agency takes over your account. If for some reason you dispute the debt, you may raise your concerns at this point.
Even though a debt collection agency is taking care of your account, your healthcare provider will still protect your privacy. To this extent, the healthcare provider will only release information on your name, address, account number, social security number and your date of birth.
The Debt Collection Law and Identity Theft
The fair debt practices collection law also has provisions for identity theft. If a collection agency contacts you regarding a debt that you have no previous knowledge of, you may be a victim of identity theft. The first thing you should do is ask for documents regarding your debt. Ask for transaction records, letters of agreement, and receipts. If you have verified that the debt is really not yours, ask the debt collector for a fraud affidavit form. Once the form is processed, the debt collector will stop contacting you and the identity thief will be pursued.
If You Are In Doubt About Fair Debt Practices
Report the debt collecter to the lender. Most lenders do not want to risk their lending licence. If it is the lender who is collecting from you, report them to an appropriate body in your country. Each state and country are different – which means we have no definitve list. Ask the lender who you can complain to – they know!