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By Michael S. Anderson of Anderson Tax Law logo for Arizona tax attorney Michael S. Anderson P.C.
  • The Fair Debt Collection Practices Act: An Overview

    Suing Abusive Debt Collectors

    Collectors of consumer debt are regulated heavily by the government. There are a number of state and federal laws that govern the debt collector’s activities. If you have consumer debt, these regulations have created certain “rights” or protections for you. Primarily, you have the right to sue a debt collector if it violates one of these laws. Additionally, most of these laws provide that the attorney fee related to bringing the suit must be paid by the losing debt collector not the consumer.

    The Fair Debt Collection Practices Act

    The most well-known debt collection law is the Federal Fair Debt Collection Practices Act (the “FDCPA”). This Federal law was enacted in 1977 and is the most commonly used law used by consumer attorneys to protect clients. The collection actions it prohibits are numerous. Many of the prohibitions are often considered “technicalities” but many of the prohibitions seek to prevent lies, serious threats and disclosure of personal information to third parties.

    The FDCPA allows the consumer to recover from the debt collector “actual” damages and statutory damages of up to $1000.00, as well as attorney fees and costs. Actual damage cases are usually the result of more serious violations and typically result in greater settlements and higher attorney fees. Even statutory damages cases, those that aren’t the result of more serious activity that results in actual damage to the consumer, are serious to the debt collector. The collector may see increased insurance rates, decreased collection rates, and the costs of defending a lawsuit as a result.

    I firmly believe that everyone should attempt to pay their debts. I do not represent clients who are attempting to use the FDCPA as a way to avoid payment of debt or to make a “quick buck” over a minor technical violation of the law.

    Where however, there is a serious violation of the FDCPA that results in actual damages to the consumer, I believe that the act should be used as the basis for a federal civil lawsuit.

    Who is covered: Definitions

    Consumer: Any person who owes or is alleged to owe a consumer debt

    Debt Collector: According to the FDCPA, a debt collector is any person, other than the creditor, who regularly collects debts owed to others and includes attorneys who regularly collect debts.

    Covered Debts:Any debt that is primarily used for personal, family, or household. Business and commercial debts are not covered. Spousal maintenance, child support, criminal fines and tort claims are generally not considered debts within the meaning of the FDCPA.

    How the Debt Collector is Allowed to Communicate

    A debt collector may communicate with you by mail, in person, by phone or by telegram (really). A debt collector cannot contact you at times or in places that they know are inconvenient to you like at work if your employer doesn’t permit it or during daytime sleep if you work at night. The collector is prohibited from calling you before 8 am and after 9 pm.

    Stopping the Communication
    If you send a written request to a debt collector demanding that they stop contacting you, the debt collector must stop contact immediately. They can however send one last communication to you advising you that they intend to take a specific action against you including the filing of a lawsuit.

    Attorney Representation
    If you are represented by an attorney concerning a consumer debt, the debt collector can’t communicate with you except through the attorney.

    Contacting Others
    A debt collector cannot contact any third party about the debt: this means that they cannot tell anyone family or friend about the debt. The debt collector is not allowed to tell anyone but you and your attorney that you owe money.

    Locating you
    A debt collector has a right to contact other people once and only once in an effort to locate you. The collector is not permitted to ask neighbors to bring you phone messages, to come across the street for a phone call, or to tell people that they are trying to collect a debt from you.

    Debt Validation – Important Tool

    Within five days after you are first contacted, a debt collector must send you a written notice telling you the following:

    • Name of the creditor
    • The amount of the debt
    • A statement that says that unless dispute the validity of the debt or any portion of it within thirty days after receipt of the notice, the debt will be assumed to be valid by the debt collector
    • A statement that if you notify the collector in writing within the 30 day period that the debt or any portion thereof is disputed, the debt collector will obtain verification of the debt or a copy of the judgment against you and a copy of such verification or judgment will be mailed to the consumer by the debt collector.
    • A statement that, upon the consumer’s written request within the 30 day period, the debt collector will provide the consumer with the name and address of the original creditor if different from the current creditor.
    • A statement that the communication is from a debt collector attempting to collect a debt and that any information obtained will be used for that purpose.

    If you dispute the debt in writing within the 30 day validation period, a debt collector can’t continue to collect on the debt until they have sent proof of the debt or a copy of the judgment.

    Prohibitions on the Debt Collector

    Harassing, Oppressive, or Abusive Language Language Prohibited

    • Use of threats of violence to person, property or reputation
    • Use of obscene language
    • Repeatedly using the phone to annoy
    • Calling you without identifying
    • Advertising your debt or publishing your name as one who refuses to pay, except to credit bureaus

    False Statements Prohibited
    The debt collector cannot use false statements when trying to collect a debt. Some common examples include:

    • Stating that papers being sent aren’t legal documents when they are
    • Stating that papers being sent are legal documents when they aren’t
    • Implying that they are an attorney
    • Implying that they are a government representative
    • Implying that they are law enforcement
    • Implying that you have committed a crime by not paying a debt
    • Lying about the amount or type of debt
    • Stating that they are going have you arrested when they cannot

    Threats that are Prohibited
    The collector cannot use threats when trying to collect. Some common threats are:

    • Stating that you will be arrested if you don’t pay
    • That the collector or creditor will seize, levy, or sell property or wage unless they actually intend to do this and they have the right to do it

    Unfairness Prohibited
    The debt collector cannot treat you unfairly while attempting to collect. This includes doing things like:

    • Collecting any amount that is greater than your debt, unless it is allowed by law
    • Depositing a post dated check more than 5 days before the date on the check, without providing notice
    • Contacting you by postcard
    • Taking or threatening to take property unless they can do so legally
    • Solicit a post dated check for the purpose of threatening criminal prosecution or threaten to cash it early

    Deception Prohibited

    • Giving false credit information about you to anyone else
    • Using a fake name
    • Sending you something that looks like an official document from a court/government agency but isn’t

    Other Prohibited Actions to Look For

    • Attempts to collect a debt that was discharged in bankruptcy
    • Attempts to collect a debt that was incurred as a result of id theft or fraud
    • Attempts to collect a debt that is owed by someone else – perhaps with same or similar name

    You Have the Right to Sue the Debt Collector

    If the debt collector has violated the FDCPA, you have the right to sue the collector within one year from the date you think the violation occurred. If you don’t, the claim will be barred. If you do, you may as stated above be entitled to damages and attorney fees.

    I am particularly interested in cases that where a debt collector has:

    • Called your family, friends, neighbors or employers to collect the debt
    • Threatened a lawsuit, garnishment, lien, or arrest for not paying the bill
    • Left abusive phone messages
    • Insulted, yelled, or swore at you
    • Called your workplace after you told them not to call you there
    • Lied to you or threatened you in any way

    If any of the above is occurring or has occurred I strongly suggest that you do the following:

    • Save copies of all letters and notices from the collection agency
    • Save all phone messages and voice mails
    • Make detailed notes about your conversations with these bill collectors