What is the Fair Debt Collection Practices Act (FDCPA)?

Fair Debt Collection
Fair Debt Collection. Joel Eichler/Getty Images

The Fair Debt Collection Practices Act (FDCPA) was enacted in 1966 and was amended by the Financial Services Regulatory Relief Act of 2006. The FDCPA protects consumers from harassment and privacy violations by bill collectors. It does not protect business customers. Here are some of the key provisions of the FDCPA that you should know about in collecting debts from customers, to protect yourself from lawsuits.

What Does the FDCPA Require My Company to Do When Contacting Debtors?

Every time you or an employee or a collections agency contacts a customer in relation to a debt owed to you, you must identify yourself and your company and state that the purpose of the contact is to collect on a debt owed you. If the debtor notifies you that he or she has an attorney, you must only contact the attorney, not the debtor directly.

What Does the Fair Debt Collection Practices Act Prohibit Businesses From Doing to Collect on Debts?

The FDCPA prohibits debt collectors from:

  • Contacting someone else to talk about a debt (you can contact someone to locate the debtor). So you cannot contact the debtor's mother or employer to ask them to help you collect. This prohibition does not apply to co-signers; since they have signed on the debt, they may be contacted.
  • If you contact someone else about a debt to locate a debtor, you cannot contact that person again.
  • You cannot communicate with a debtor at "inconvenient" times or places, such as phoning during the middle of the night or at the debtor's workplace
  • You cannot contact a debtor if you have received a "cease and desist" request, a notice that you must only communicate through the debtor's attorney or a notice that the debtor refuses to pay the debt.
  • You cannot engage in "harassing, oppressive, or abusive" contact, or threaten violence.
  • You cannot use profane language when attempting to collect on a debt.
  • You cannot falsely represent yourself or represent yourself as someone else, including an attorney or a government agency, in order to collect on the debt.
  • You cannot call the debtor on the phone too often or after regular waking hours (like 2 a.m.)

Can a Debtor Sue Me?

Debtors can and do initiate lawsuits against debt collectors who they perceive are engaging in harassment or other illegal tactics to collect on a debt. Not only does the lawsuit stop the debt collection process, but then you are forced to defend yourself against a suit, tying up more money and time.

How Can I Protect Myself and My Company From Debtor Lawsuits?

  • First, read as much as you can about the FDCPA and talk to your attorney about its provisions, before you start collecting on debts.
  • Second, avoid any appearance or perception of harassment or privacy invasion, in every contact with those who owe you money.

Disclaimer: This article is a brief overview of the provisions of the FDCPA. The law is complex, and there may be specific sections that are applicable to your business. Please consult with your attorney before attempting to contact customers for collection purposes.

For more information, read this Fair Debt Collection Practices Act text (in PDF format).

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