Fair Debt Collection Practices

Debt collection is a legal business activity, wherein creditors and debt collectors take reasonable steps for recovering money from debtors, who are legally bound to repay the money that they owe. Debt collection agencies are professional organizations, dealing with debt recovery. As a debt collector, one needs to understand certain legal obligations, like communicating with debtors for a reasonable settlement and treating them with respect and courtesy.

However, many debtors complain about the abusive nature of the debt collectors. A call from the debt collection agency can be annoying. Sometimes, they even threaten to take legal action, if the debtor fails to pay the owed money in time. It is to be noted that the creditor has the authority to sue the debtor, but not the debt collection agency. The agency can only recommend certain legal remedies to the creditor with regard to collecting money from the debtor.

What if the debt collector harasses/abuses the debtor or uses false statements? In such situations, the debtor can utilize his/her rights that has been stated under the Fair Debt Collection Practices Act (FDCPA). Though the law cannot help settle the money that a debtor owes, it ascertains that the consumers are treated fairly by the debt collectors. Let's take a look at the rights of the debtor under FDCPA.

Under the FDCPA, debts regarding personal, family and household are covered. This may include money owed for purchasing home, automobile and medical care.

According to the act, a debt collector cannot harass or abuse the debtor by using offensive language, or call frequently or at unusual hours, or demoralize and embarrass them in front of the public. The debt collector also cannot publish a list of debtors.

Under the FDCPA, a debt collector cannot use any false statements, while collecting the debt from a consumer. For example, a debt collector cannot give a false debt statement. The debt collector should not misrepresent as attorneys or government representatives or employees of a credit bureau, while collecting the debt. They are not supposed to misguide the debtor by indicating legal forms as non legal ones and vice versa. A debt collector cannot imply that the consumer has committed a crime when he/she fails to pay back the debt money.

The debt collectors cannot threaten the debtor that he/she will be arrested in case of failure in paying the debt. They should not threaten legal actions such as seizing a collateral or garnishment of wage.

The act also protects the debtor against unfair practices such as collecting an amount greater than the debt, contacting you by a postcard, depositing a post-dated check and using deception so that the debtor accepts the call.

If a person receives calls regarding debts that he/she does not owe, the person can send a letter to the debt collection agency for clearing the doubt. In case, a debtor believes that a debt collector has violated the law, he/she can take legal action against the debt collector by filing a case in the state or federal court. Suing a debt collector should be done within one year from the date that the law was violated. If the debtor wins the case, then he/she may recover the court expenses and an additional amount for the damages incurred.