Consumers have numerous rights with regards to debt collection and the more they know about illegal practices the better they are to protect themselves from unscrupulous collection agencies. While some illegal practices may seem obvious like not receiving collection calls at three in the morning or having a collection agency threaten to harm you or your family there are other more subtle forms of harassment that may not be as readily apparent. This article will provide a brief overview of various practices which are illegal and will go a long way to empowering consumers when they owe money.
In order to maintain a paper trail and support your position it is best to conduct all interactions with a collection agency in writing. If possible use certified mail for important legal documents or at a minimum use e-mail as this information may become invaluable should you need to file a lawsuit for harassment. If you are unable to conduct business in writing, it is recommended to go through a computer and record your phone calls. Keep in mind recording phone calls sometimes requires one party or two-party notification as specified by state law. As a rule of thumb always inform the other party that you are recording the call which should cover all cases. Now that you know how to conduct business it is important to understand your rights on debt collection.
In 1996 the United States Congress passed the Fair Debt Collection Practices Act which provides a set of legally binding rules and guidelines that any organization collecting on an outstanding debt must follow. Before the FDCPA, some collection agencies would participate in reprehensible behavior to the point of physically threatening a debtor or their family or calling them dozens of times per day. Essentially, these agencies would do whatever it took to collect on an outstanding debt. By creating the FDCPA, consumers were suddenly empowered the fight back against egregious and abusive collections practices and have legal recourse against those collection agencies who don't follow the law.
Some examples of protections provided by the FDCPA are who collection agencies can speak with and when they can speak with a debtor. Collection agencies are legally only allowed to speak with a debtor or responsible third party after 8 AM and before 9 PM. They are also prohibited from making excessive contact with a debtor which any reasonable person would construe as harassment. So even if a collection agency is calling between the legally allowed times they cannot call dozens of times per day. Agencies are also not legally allowed to speak with individuals who were not the debtor or a responsible third party such as friends and family or coworkers. Speaking with these individuals and discussing personal financial information is illegal and can result in a lawsuit for the agency. It is also illegal to use profane or abusive language when collecting on a debt such as swearing or threatening bodily harm. Collection agents will also sometimes misrepresent a position of authority by claiming to be law enforcement or work for a government agency like the IRS. They will then use this ruse to threaten arrest if the debtor does not provide account information and make payment on the outstanding debt immediately. This of course is illegal and inaccurate as you cannot be arrested for owing a debt, barring fraud or other already illegal means. If a collection agency threatens a lawsuit they are legally obligated to actually be in the process of filing and cannot simply use it as a means of coercion.
This is just a brief overview of your rights and protections under the FDCPA but it behooves all consumers to read the original document in full to better protect themselves. The Fair Debt Collection Practices Act is an important piece of legislation which empowers consumers by putting them on equal footing with businesses and their debt collection practices. Not only is knowing your rights important for peace of mind but it can often stop collection agency harassment dead in its tracks when they know they're dealing with an informed and educated consumer willing to stand up for themselves.