In the USA the Fair Debt Collection Practices Act (also known as the FDCPA) is a law that was added in 1978, which protects people in financial trouble from debt collectors that use illegal methods to extract money from people. It also provides an avenue for consumers to contest any information that is not correct that may be on their record. This extract gives an overview as we understand it although it is brief and we do not warrant the accuracy of the information.

Debt collectors, are by definition according to the FDCPA, as any person in a business where the main purpose is the collection of any debts, directly or indirectly. This may be debts due or owed or asserted to be owed or due. As well as any person who uses a instrument of commerce or mail.

This covers the collection of debt from you by a collection agency on the behalf of banks. The FDCPA does not apply when the bank collects directly from you although some states differ and their laws regulate financial institutions as well.

The obligations of debt collectors:

- When contacting you they must tell you who they are and that they are a debt collector.

- They must give notification that you can dispute the debt and this is called a 1692g notice.

- If you require information (ask in writing within 30 days of receiving this notice.) they must tell you who the creditor is (name, address of company that you have a debt with) they must also give you proof of the debt.

- If they file a lawsuit, it must be in the city where you signed the contract or where you live now. The debt collector can only file the law suit in those two cities, no other place.

Restrictions of debt collectors:

- If you give them written notice they cannot contact you with other details such as you are not paying the debt. They will not be able to contact you but there are exceptions for example that they want to tell you they're filing a law suit or they will dissolve the debt.

- They cannot phone you before 8am or after 9pm, your time zone.

- They cannot contact you at work after you've stated it in writing.

- They cannot constantly ring and harass you by phone.

- They cannot contact you if you've given your attorney's details who's representing you. They need to contact the attorney instead.

- They must not deceive or misrepresent. They cannot claim to be an attorney or lie about who they are and they cannot demand more money than what you owe.

- If you've asked for verification of debt within 30 days of the 1692g notice; they cannot contact you until they have sent you the details.

- They cannot threaten you with arrest or legal action unless these are being planned and possible.

- They cannot publish your details on a bad debt list.

- They cannot use abusive language.

- They cannot threaten to tell other people for example, an employer and they can only tell people involved e.g. spouse or attorney.

- They cannot contact you in a way they reveal your details e.g. a letter or postcard marked being from a debt collection source.

- They cannot put false details on your credit report.

- If any of the above practices have occurred to you report the incident to the Federal Trade Commission. They will enforce the Fair Debt Collection Practices Act.

© copyright Wing Family Trust. All rights reserved worldwide October 2009.