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Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) applies to personal, family, and household debts. This includes money owed for the purchase of a car, for medical care, or for charge accounts. The FDCPA prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts.

Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.

The FDCPA covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn't cover debts you incurred to run a business.

Summary of the Fair Debt Collection Practices Act:

  • A collector can contact you in person, by mail, telephone, or fax. A debt collector is not permitted to contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also must refrain from contacting you at work if the collector is aware that your employer disapproves.
  • You can stop a collector from contacting you by writing a letter to the collection agency telling them to stop, or by informing them you refuse to pay the debt. Any letters sent to a collection agency should be sent by certified mail so that you can prove the letter was mailed and received. Once the agency receives your letter, they may not contact you again except to notify you if the debt collector or the creditor intends to take some specific action, such as suing you.
  • A debt collector may not disclose to third parties (friends, relatives, bosses, neighbors, etc.) that they are collecting a debt from you. If you have an attorney, the debt collector may not contact anyone other than your attorney. If you do not have an attorney, a collector may contact other people, but only to find out where you live and work. Collectors usually are prohibited from contacting such permissible third parties more than once.
  • Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.
  • A collector may not contact you if, within 30 days after you are first written, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
  • If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. A debt collector may not apply a payment to a debt you don't think you owe.

 

What practices are off limits for debt collectors?

Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact.

Debt collectors may not:

  • employ threats of violence or harm;
  • issue a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
  • use obscene or profane language; or
  • repeatedly use the phone to bother someone.

False statements. Debt collectors can not lie while they are trying to collect a debt.

Debt collectors may not:

  • wrongly claim that they are attorneys or government representatives;
  • falsely claim that you have committed a crime;
  • falsely represent that they operate or work for a credit reporting company;
  • misrepresent the amount you owe;
  • specify that papers they send you are legal forms if they aren't; or
  • imply that papers they send to you aren't legal forms if they are.

Debt collectors also are prohibited from saying that:

  • you will be arrested if you don't pay your debt
  • they'll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so;
  • legal action will be taken against you, if doing so would be illegal or if they don't intend to take the action.
  • intend to take action

 

Can a debt collector garnish my bank account or my wages?

If you don't pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgement against you. The judgement states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.

Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don't ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.

Many federal benefits are exempt from garnishment, including:

  • Social Security Benefits
  • Supplemental Security Income (SSI) Benefits
  • Veterans' Benefits
  • Civil Service and Federal Retirement and Disability Benefits
  • Service Members' Pay
  • Military Annuities and Survivors' Benefits
  • Student Assistance
  • Railroad Retirement Benefits
  • Merchant Seamen Wages
  • Longshoremen's and Harbor Workers' Death and Disability Benefits
  • Foreign Service Retirement and Disability Benefits
  • Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
  • Federal Emergency Management Agency Federal Disaster Assistance

But federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.

Do I have any recourse if I think a debt collector has violated the law?

You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can't prove that you suffered actual damages. You also can be reimbursed for your attorney's fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.

What should I do if a debt collector sues me?

If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.

Where do I report a debt collector for an alleged violation?

Report any problems you have with a debt collector to your state Attorney General's office (www.naag.org) and the Federal Trade Commission (www.ftc.gov). Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General's office can help you determine your rights under your state's law.

To learn more about debt collection and other credit-related issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government's portal to financial education.

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