Fair Debt Collection Practices Act (FDCPS), What is it? Print E-mail
Written by Kerry S. Doolittle   
Friday, 09 April 2010

Application


The Fair Debt Collection Practices Act or "FDCPA" applies to efforts to collect consumer debts from natural persons, i.e. debts arising from personal, family, or household purposes. It does not apply when the Debtor is a corporation or partnership. It does not apply to debts arising from commercial transactions. It does not apply to alimony, support claims, personal injury and property damage claims, unpaid taxes, or fines.


A "debt collector" is defined as any person who uses any instrumentality of interstate commerce or the mails in any business, the principal business of which is the collection of any debts, or who regularly collects, or attempts to collect, directly or indirectly, debts owed or asserted to be owed or due another. This can include attorneys and any creditor in the process of collecting his own debts if he uses a name other than his own (suggesting that a third party is collecting).


A "consumer" means any natural person obligated to pay a debt, but for purposes of communications includes the spouse, parent (if a minor), guardian, executor, or administrator.
 

Permitted Communications


Except in efforts to obtain location information, you are required in all communications to disclose that:
 
●    you are attempting to collect a debt, and

●    any information obtained will be used for that purpose.


In the first communication to the debtor, you are also required to disclose and include:
 
●    the amount of the debt;
 
●    the name of the creditor to whom the debt is owed;
 
●    a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
 
●    a statement that if the consumer notifies the debt collector in writing within the thirty day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer, a copy of whic will be mailed to the consumer;
 
●    a statement that, upon the consumer's written request within the thirty day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.


Disputed Debts


If the consumer notifies the debt collector in writing within the thirty day period that the debt, or any portion, is disputed, or requests the name and address of the original creditor, all efforts to collect the disputed portion must cease until verification of the debt or a copy of the judgment or the name and address of the original creditor is obtained and mailed to the consumer.
The failure of the consumer to dispute the validity of a debt may not be construed as an admission of liability.


Location Information


When you communicate with any person other than the consumer for the purpose of obtaining location information, you must:
 
●    identify yourself;
 
●    state that you are confirming or correcting location information concerning the consumer;
 
●    only if expressly requested, identify your employer;
but, you may not:
 
●    state that the consumer owes any debt;
 
●    communicate with any such person more than once unless requested to do so by such person or unless you reasonably believe that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information;
 
●    communicate by post card;
 
●    use any language or symbol on any envelope that indicates that you are in the debt collection business or that the communication relates to the collection of a debt;
 
●    if you know the consumer is represented by an attorney, communicate with any person other than the attorney, unless the attorney fails to respond within a reasonable time to communications from you.


Restricted or Prohibited Acts or Communications


You may not:
 
●    communicate with the consumer at an unusual time or place, or a time or place known to be inconvenient (call between 8:00 a.m. and 9:00 p.m.);
 
●    communicate directly with the consumer if represented by an attorney;
 
●    communicate with the consumer at his place of employment if you know or have reason to know that the employer prohibits the consumer from receiving such communications;
 
●    communicate with anyone other than the consumer, his attorney, a consumer reporting agency (if otherwise permitted), the creditor, the creditor's attorney, or your attorney (except to acquire location information);
 
●    communicate with the consumer after he, in writing, refuses to pay a debt or wishes the debt collector to cease further communication, except to advise the consumer that collection efforts are being terminated, or to notify the consumer that specific remedies may or will be invoked;
 
●    communicate by post card;
 
●    use any language or symbol on any envelope or telegram that indicates that you are in the debt collection business or that the communication relates to the collection of a debt, except that you may use your business name if the name does not indicate that you are in the debt collection business;
 
●    spread false credit information about consumers;
 
●    make any false or deceptive statements;
 
●    threaten to furnish false credit information;
 
●    use any unfair or unconscionable means to collect any debt.
 
●    collect any sum in excess of the sum legally due under the contract or state law;
 
●    persuade consumers to accept collect telephone calls or telegrams by concealing the true purpose of the communication.
 
●    take or threaten to take non-judicial action (i.e. self-help) to effect a repossession of the collateral if (1) you have no right to possession under an enforceable security agreement, or (2) you have no present intention to repossess the property, or (3) if the property in question is exempt by law;
 
●    tell a consumer who has disputed a debt that his credit will be wrecked if not paid now;
 
●    send a note to a consumer to call an agent right away unless there has been prior contact and the agent is known to the consumer;
 
●    engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person;
 
●    use or threaten to use violence or other criminal means to harm the physical person, reputation, or property of any person;
 
●    use obscene or profane language;
 
●    publish a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency;
 
●    advertise for sale any debt to coerce payment of the debt;
 
●    cause a telephone to ring or engaging any person in telephone conversations repeatedly or continuously with intent to annoy, abuse, or harass;
 
●    place telephone calls without meaningful disclosure of your identity.


Post-Dated Checks


Solicitation or acceptance of post-dated checks is not prohibited. However, it is recommended that you do not accept post-dated checks. If you do, you should not attempt to deposit or cash the check until after the date shown on the face of the check, and only after giving the person who wrote the check advance, written notice of your intent to deposit the check at a specified time.


Civil Liability


For violations of the FDCPA, you can be held liable for:
 
●    any actual damages suffered by the consumer;
 
●    punitive damages in an individual case up to $1,000;
 
●    punitive damages in a class action case up to $1,000 per plaintiff or up to the lesser of $500,000 or 1% of your net worth;
 
●    litigation costs and attorney's fees.


You can avoid liability by showing that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.
 

Good Luck.

 Kerry S. Doolittle

Last Updated ( Friday, 09 April 2010 )
 
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