Lots of people owe lots of money in these bad economic times. Job losses, falling property values, lack of health insurance and fewer government benefit programs are just some of the most obvious reasons. Many debts are legitimately owed and many debtors are late in their payments. However, federal and state consumer-protection laws set limits to how far debt collectors can go to collect delinquent debts.
Debt collectors are usually defined in the law as parties who try to collect debts on behalf of creditors. Remember, just because you owe someone money, collectors are not allowed to harass and frighten you.
Passed in 1977, the Fair Debt Collection Practices Act - FDCPA for short - is the main federal law controlling the practices of debt collectors in their interactions with consumer (as opposed to commercial) debtors. The Federal Trade Commission is the main federal agency charged with enforcing the FDCPA. The FTC's job is to "curtail deceptive, unfair, and abusive debt collection practices in the marketplace."
The types of collection behavior controlled by the FDCPA include how, when and where collection efforts may happen; with whom can collectors share private debt information; the type of language and manners a collector can use (not threatening or harassing); truthfulness in dealings; required notices; and more.
The FTC provides public educational information about what debt collectors may and may not do in their efforts to collect money on behalf of creditors. Consumers may file complaints about debt-collector conduct with the FTC. In response to a complaint, the agency may investigate and bring enforcement action against the collector.
The FTC reported to Congress that the agency received over 100,000 such complaints in 2010. The top-ten 2010 complaint categories were:
- Multiple calls
- Misrepresentations about nature of debts
- Failure to provide required written notices
- False threats of illegal actions
- Failure to identify as debt collectors
- Multiple calls to third parties about debtors
- False threats of arrest or property confiscation
- Obscene or abusive language
- Illegal calls to debtors at their workplaces
- Sharing personal debt information with third parties
A debtor also may file a private lawsuit in federal or state court for FDCPA violations.
Your state's laws may also help to protect you from unsavory debt-collection practices. For example, the Colorado Attorney General's Office, through the Administrator of the Collection Agency Board, takes complaints about, investigates and prosecutes violations of the Colorado Fair Debt Collection Practices Act, Colorado's consumer-protection statute. A consumer may also bring a private lawsuit under this state law against a debt collector.
If you are the target of an aggressive debt collector, consult an experienced attorney knowledgeable about federal and state consumer-protection laws. Protect yourself and assert your rights.