Your Rights As A Debtor

(This article was compiled by Gary Edwards, a Westminster Lawyer, and describes how some collection agencies break the law, often intentionally without the knowledge of the consumer. This article aims to inform you of those laws to better arm yourself in the face of unscrupulous agencies.)

If you use credit cards, have taken out a personal loan that you own money on, or are paying a home mortgage, you are defined as a "debtor." If you fall behind when repaying your creditors, or if an error is made on your accounts, it is likely you will be contacted by what is known as a debt collector.

You should know that in this situation, the US Fair Debt Collection Practices Act requires that debt collectors treat you fairly by adhering to certain debt collection rules. What follows is a number of answers to commonly asked questions about your rights under the Fair Debt Collection Practices Act.

What kind of debts are covered under the Act?
Personal, family, and household debts are covered under the Fair Debt Collection Practices Act. This includes money owed on automobile purchases, for medical care, or for credit card accounts.

Who is a collection agency or debt collector?
A debt collector is a person or agency that is not the creditor, whose business it is to collect debts owed to others. Under a recent (1986) amendment to the Fair Debt Collection Practices Act, this can also include attorneys who collect debts.

How will a debt collector contact you?
A collector or agency uses a variety of different contact methods, including mail, telephone, fax or in person. An important rule to remember, however, is that a debt collector may not contact you via telephone at unreasonable times or places, such as before eight o'clock a.m. or after nine o'clock p.m. unless you have previously agreed. A collector also may not contact you at work if the collector is aware that your employer disapproves of such calls.

Who else can the debt collector speak to about my debt?
Other than your attorney, a collector may speak to no one. If you do not have an attorney, a collector may contact other people, but only as a means to discover where you work and live. They are NOT to speak about your debts. In fact, as a rule, collectors are prohibited from contacting such third parties more than once.

What must a debt collector tell you about the debt?
Within five days after first contact, a collector must send you a written notice of the total amount of money owing, the name of the creditor, and what avenue of action you may take if you believe you do not owe the money or a mistake has been made.

What debt collection practices are prohibited by law?
Debt collectors must abide by certain rules. For example, debt collectors may not oppress, abuse, or harass anyone.

Here are some examples of tactics debt collectors may not take:

Publish a list of consumers who refuse to pay their debts (except to a credit bureau);
Address you with obscene or profane language
Threaten harm against your person, property or public reputation
Call excessively to the point of harassment
Call you without first identifying him/herself as a collector

Debt collection agencies also are prohibited from using false statements when collecting a debt.
Here are some examples of what a debt collection agency representative cannot do:

Imply falsely that they are attorneys or represent the government
Imply that you have committed a crime of some sort
Represent themselves falsely as working for a credit bureau
Give you false information as to the total amount of your debt
Mislead you into thinking that papers they have sent to you are legal forms when they are in fact not

Finally, debt collectors are strictly constrained as to what they can say to you, so often using a telephone tape recorder can help you obtain evidence. You must mention, however, that the conversation is being taped, in most cases.

A debt collector cannot say the following things:

that you will be arrested if payment is not received
that assets may be seized, wages garnished or property sold unless the collection agency intends to do so, and it is legal (it rarely is)
that a lawsuit will be filed against you, as this is not legal

What should I do if I feel a debt collector may have violated the law?
It is your right to sue a collector in a state or federal court within one (1) year from the date you believe the violation takes place. If you win, you may recover money for damages, including court costs and attorney fees.

For a free, confidential debt consultation, please contact an Affinity representative here.