Info about Debt Collection
Fair Debt Collection
The Fair Debt Collection Practices Act contains the rules that must be followed for debt collection. It was created as an addition to The Consumer Protection Act in 1978. It strictly controls the practices used by debt collectors. It includes restrictions for communication and other rules that have to be followed.
Under these rules, a debt collector may not harass you or abuse you while trying to collect a debt. This includes repeatedly calling consumers continuously, threatening the use of violence toward a debtor or his property, or using obscene and offensive language. It is not legal for debt collectors of publish lists of consumers who owe money. They can only report nonpayment to consumer reporting agencies.
The federal law says that debt collection companies can not use any deceptive methods or false representation in the attempt of collecting a debt. This includes may communication from them appear as if it came from an attorney.
A consumer cannot be asked by a debt collector to pay more than the amount they owe or add interest, expenses, or fees that are not provided by law. The depositing of post dated checks has strict limitations.
The Fair Debt Collection Practices Act requires debt collectors to provide proof that the debtor actually owes the debt they are trying to collect.
Collection agencies cannot cause charges to consumers by concealment. This includes telephone calls or cell phone calls. They can also not threaten to confiscate property unless they have a legal right to do so.
Debt collection agencies have to send a written validation of the debt to the debtor within five days of their first communication. It is required to include the name of the original creditor, amount of the debt, and the notice of the consumer’s right to dispute the debt before thirty days have passed.
If the consumer disputes the debt in writing and sends it to the collection company before the thirty days pass, the collector must stop all efforts to collect until the consumer is mailed proof that he owes the debt.
If a debtor owes more than one debt, the collector has to distribute and apply all payments according to directions of the consumer.
Debt collectors who want to bring legal action against a debt that is secured by real estate must do it in the judicial district where the real estate is located. If the debt is not secured with real property, the collection agency has to file legal action in the district where the original contract was signed or where the debtor resides.
If the rights of the consumer are violated the consumer is allowed one year after the date the violation occurred to file a suit against the debt collection agency. The courts can award the consumer up to one thousand dollars over the actual damages and court costs plus a reasonable attorney fee.
This article is just a summary of rights and restrictions of debtors and debt collectors that are provided by federal law. There may be other specifics involved, but these are the basic rules of debt collection.