The Fair Debt Collection Practices Act 1977 was introduced to protect struggling U.S. consumers from unlawful creditor harassment. Those who are struggling with personal debt will inevitably deal with a collection agency should they default on an agreement. Find out what rights collection agencies do and don’t have when contacting a debtor for repayment.
How can Debt Collection Agencies Make Contact with a Debtor?
A collection agency is legally able to contact a debtor between the hours of 8am and 9pm. The only exception to this rule is when a debtor agrees to a meeting taking place. Contact can be by mail, telephone, telegram, fax or in person. Debt collection agencies cannot contact a debtor whilst they are at work if the employer does not approve of this practice.
Outstanding Personal Debts and Third Party Contact
Debt collection agencies are only allowed to talk to a third party to find out where the debtor lives, a phone number or their place of work. They should not normally inform a third party that the reason for making contact is due to unpaid personal debts. Should the debtor have employed the services of an attorney, they should be contacted rather than the person who owes money.
Debt Collection Agencies Must Provide Written Notice
A collection agency is legally obliged to provide the debtor with written notification within 5 days of the initial contact. This correspondence must document the outstanding personal debt, the name of the creditor and how they should proceed if the money is not owed by them. Should the debtor advise within 30 days that they don’t owe the money, collection activity must cease. This can be revoked should a debt collection agency be able to prove that this money is owed.
Unlawful Creditor Harassment Practices
- A collection agency cannot state or imply that they are a government representative, attorney or represent a credit bureau.
- Tell the debtor that they have committed a criminal offence or that an arrest will be made if any personal debt isn’t repaid in full.
- State that a debtor owes more than they actually do.
- Provide false information to the debtor or any third party.
- No documentation can be sent to a debtor that gives the impression that it has been sent by a court or government body when this is not the case.
- Debt collection agencies must not tell debtors that they will face an earnings attachment or a lien will be placed on the family home unless the creditor intends and has a legal right to do so.
Debt collection agencies regularly flaunt powers that they don’t legally have in order to try to collect outstanding personal debt. Those in financial difficulty should consult a licensed credit counselor in order that they can identify the most appropriate course of action.