Fair Debt Collection Practices Act (FDCPA)

If you have gone over your head in debt, or are trying to improve your credit rating, this law is probably the most important one for you to know. Many collection agencies skirt legal limits, while others will ignore them completely in an effort to get your money. The average consumer has absolutely no clue what their rights are. As a result, these collectors continue to harass and threaten people knowing that, more often than not, they are going to get paid.

If you don't know how a collection agency works, exactly, here is the lowdown. For whatever reason, you stopped paying on that maxed out credit card sitting in your wallet. You ignored the late notices and phone calls, hoping they'd go away until you could get back on your feet. Rent and Electricity are more important after all. Eventually you start getting phone calls from Slimeball Collections, LLC.
At this point, your credit card company has reported your account as a charge-off, which will stay on your credit report for the next 7 years. Meanwhile, they sold your debt to Slimeball Collections, LLC. These debts are often sold for pennies on the dollar. This is important to know for several reasons, which I will talk about another time. For now what matters to you is that your debt is no longer to the credit card company. You can never pay them back. Slimeball, LLC now has a vested interest in taking your money. Those agents calling you work on a commission based system. If they can skirt, or even break the law to increase their own income, often times they will do just that without batting an eye.

You don't have to take it. Better yet, if you find yourself in a situation where you are being illegally harassed you may even be lucky enough to turn the tables, paying off your debts with their money.

The Fair Debt Collection Act, or FDCA, promotes the fair treatment of consumers by prohibiting debt collectors from using unfair, deceptive, or abusive practices.

Debt collectors are permitted to call you only between the hours of 8am and 9pm. That said, they may only communicate with you, the debtor. They are permitted to contact other people only to locate or in an effort to communicate the debtor. Furthermore, they are not permitted to disclose any information about their business with you. The only exemption to this, ever, is if you specifically and directly give them consent to contact a specific person or if they obtain a court judgement to do so.

After making initial contact, collectors are required to send a written notice to the debtor informing them of the debt, the name of the creditor, and offering them the opportunity to dispute the debt within the next 30 days before assuming the debt is valid.

Debt collectors are prohibited from harassing, oppressing, or being abusive in collecting a debt. They can not cause your phone to ring off the hook or initiate repeated conversations with you simply in an effort to annoy you. They are not even allowed to use obscene language (and yes, this is specified in the legal jargon)!
Also, debt collectors can not attempt to mislead you by misrepresenting their own identities, the status of the debt, or the consequences if the debt does not get paid. Threatening consumers with jail time is common, and illegal practice. Don't let it happen to you!
Bait and switch tactics are also illegal. An example of this may be to cost you fees by making collect calls to your home pretending to be someone they are not, or falsifying forms specifically made to make you believe there is a 3rd entity involved in the collection process.

In short, if you have been dealing with a collection agency and for whatever reason you feel abused, embarrassed, or threatened; chances are they've broken the law. If that applies to you, click the link above to access the FTC official documents. There is a lot of legal jargon, but it is written to be concise, yet not too difficult for the Average Joe to understand. After you've done that, sue their pants off and send me your story.