Federal Trade Commission March
1999
If you use credit cards, owe money on a personal loan, or are
paying on a home mortgage, you are a "debtor." If you fall behind in repaying
your creditors, or an error is made on your accounts, you may be contacted by a
"debt collector."
You should know that in either situation, the Fair Debt
Collection Practices Act requires that debt collectors treat you fairly by
prohibiting certain methods of debt collection. Of course, the law does not
forgive any legitimate debt you owe.
This brochure answers commonly asked questions about your
rights under the Fair Debt Collection Practices Act.
What debts are
covered? Personal, family, and household debts are covered under
the Act. This includes money owed for the purchase of an automobile, for
medical care, or for charge accounts.
Who is a debt
collector? A debt collector is any person who regularly collects
debts owed to others. This includes attorneys who collect debts on a regular
basis.
How may a debt
collector contact you? A collector may contact you in person, by
mail, telephone, telegram, or fax. However, a debt collector may not contact
you at inconvenient times or places, such as before 8 a.m. or after 9 p.m.,
unless you agree. A debt collector also may not contact you at work if the
collector knows that your employer disapproves.
Can you stop a
debt collector from contacting you? You can stop a debt collector
from contacting you by writing a letter to the collection agency telling them
to stop. Once the agency receives your letter, they may not contact you again
except to say there will be no further contact or to notify you that the debt
collector or creditor intends to take some specific action. Please note,
however, that sending such a letter to a collector does not make the debt go
away if you actually owe it. You could still be sued by the debt collector or
your original creditor.
May a debt
collector contact anyone else about your debt? If you have an
attorney, the debt collector must contact the attorney, rather than you. If you
do not have an attorney, a collector may contact other people, but only to find
out where you live, what your phone number is, and where you work. Collectors
usually are prohibited from contacting such third parties more than once. In
most cases, the collector may not tell anyone other than you and your attorney
that you owe money.
What must the debt
collector tell you about the debt? 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.
May a debt
collector continue to contact you if you believe you do not owe money?
A collector may not contact you if, within 30 days after you receive the
written notice, 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.
What types of debt
collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress,
or abuse anyone or any third parties they contact. For example, debt collectors
may not:
- use threats of violence or harm;
- publish a list of consumers who refuse to pay their debts
(except to a credit bureau);
- use obscene or profane language; or
- repeatedly use the telephone to annoy someone;
False statements. Debt collectors may not
use any false statements when collecting a debt. For example, debt collectors
may not:
- falsely imply that they are attorneys or government
representatives;
- falsely imply that you have committed a crime;
- falsely represent that they operate or work for a credit
bureau;
- misrepresent the amount of your debt;
- indicate that papers being sent to you are legal forms when
they are not; or
- indicate that papers being sent to you are not legal forms
when they are.
Debt collectors also may not state that:
- you will be arrested if you do not pay your debt;
- they will seize, garnish, attach, or sell your property or
wages, unless the collection agency or creditor intends to do so, and it is
legal to do so; or
- actions, such as a lawsuit, will be taken against you,
which legally may not be taken, or which they do not intend to take.
Debt collectors may not:
- give false credit information about you to anyone,
including a credit bureau;
- send you anything that looks like an official document from
a court or government agency when it is not; or
- use a false name.
Unfair practices. Debt collectors may not
engage in unfair practices when they try to collect a debt. For example,
collectors may not:
- collect any amount greater than your debt, unless your
state law permits such a charge;
- deposit a post-dated check prematurely;
- use deception to make you accept collect calls or pay for
telegrams;
- take or threaten to take your property unless this can be
done legally; or
- contact you by postcard.
What control do
you have over payment of debts? If you owe more than one debt, any
payment you make must be applied to the debt you indicate. A debt collector may
not apply a payment to any debt you believe you do not owe.
What can you do if
you believe a debt collector violated the law? You have the right
to sue a collector in a state or federal court within one year from the date
from the date the law was violated. If you win, you may recover money for the
damages you suffered plus an additional amount up to $1000. Court costs and
attorneys fees also can be recovered. A group of people also may sue a debt
collector and recover money for damages up to $500,000, or one percent of the
collectors net worth, whichever is less.
Where can you
report a debt collector for an alleged violation? Report any
problems you have with a debt collector to
your state Attorney Generals
office and the Federal Trade Commission.
Many states have their own debt collection laws, and your Attorney Generals
office can help you determine your rights.
The FTC works for the consumer to prevent
fraudulent, deceptive and unfair business practices in the marketplace and to
provide information to help consumers spot, stop and avoid them. To
file a
complaint or to get free
information on consumer issues, visit the www.ftc.gov or call toll-free, 1-877-FTC-HELP
(1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing,
identity theft and other fraud-related complaints in to
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