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A strong federal law, the Fair Debt Collection Practices Act, protects consumers against certain unfair collection practices. It applies only to outside, or third-party debt collectors (not creditors collecting their own debts) and only for personal (not business) debts. State laws may provide additional protection.

In its 2018 annual report to Congress about debt collection complaints, the Consumer Financial Protection Bureau described collection complaints received by the Federal Trade Commission.

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In 2018, the FTC received 84,500 complaints about debt collectors — down from 88,000 in 2017. A complaint does not mean a law has been broken, and some complaints may be the result of overseas debt collection scammers who harass consumers.

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A collection account can have a major credit score impact. If you’ve been contacted by a collector and are worried your credit is being hurt, you can check two of your credit scores for free on Credit.com.

Attempts to Collect a Debt Not Owed

Percentage of complaints: 39%

The law: If you don’t think the debt belongs to you, you can send a request in writing within 30 days of receiving the initial notice that you want verification of the debt. You can also request in writing that the debt collector no longer contact you.

Written Notification About Debt

Percentage of complaints: 22%

The law: Within five days of initially contacting you, the collector must send written notice of the debt that includes:

The amount of the debt

The name of the original creditor to whom the debt is owed

A statement describing your right to dispute the debt

Communication Tactics

Percentage of complaints: 13%

The law: Collectors can’t call repeatedly just to harass you. (However, there is no specific number of calls that they can make within a given time period. That’s left up to the courts to decide.) If you think a debt collector is calling too often, start making a record of every time they call and any messages they leave. Collectors also may not call before 8 a.m. or after 9 p.m. (unless you’ve permitted them to do so), or at times you’ve told them are inconvenient.

Took or Threatened to Take Negative or Legal Action

Percentage of complaints: 11%

The law: Collectors can’t threaten a lawsuit, criminal prosecution, wage garnishment, jail time, or to ruin your credit rating unless they have the legal authority to do so and intend to do so. These threats are often illegal. Collectors must usually take you to court first and win before they can take these kinds of actions — if they are legal in the first place.

False Statements or Representations

Percentage of complaints: 10%

The law: Collectors can’t threaten a lawsuit, criminal prosecution, wage garnishment, jail time, or to ruin your credit rating unless they have the legal authority to do so and intend to do so. These threats are often illegal. Collectors must usually take you to court first and win before they can take these kinds of actions — if they are legal in the first place.

Threatened to Contact Someone or Share Information Improperly

Percentage of complaints: 4%

The law: Collectors can call third parties such as family, neighbors, friends or co-workers only to locate the debtor. When they do, they can’t reveal the debt, and there are limits on repeated calls.

Debt Collection Laws

The Fair Debt Collections Practices Act (FDCPA) is a federal law in place to place limitations on what debt collectors can do and say when attempting to collect a debt. This federal law covers a variety of instances including mortgages, credit cards, medical debts, and any other debt for personal, family, or household purposes.

Unfortunately, the debt that the FDCPA cannot cover is business debt or debt that is owed to the original creditor, rather than the collection agency.

As stated above, time and place, harassment, and representation are all factored in with these federal laws. A debt collector cannot contact you in an unusual place or at an unusual time that they would know is inconvenient.

They are required to refrain from using any type of harassment methods or scare tactics as well in regard to the debt that may be owed. Additionally, if they are aware that you have sought legal representation for the matter, then they must immediately stop communication with you directly and instead, they need to be contacting the attorney.

The Fair Credit Reporting Act

Another federal law is the Fair Credit Reporting Act, and this act covers certain financial aspects including any debt being collected and reported on your credit report.

Under this law, it protects unfair, deceptive, or abusive acts or practices to be done by either collection agencies or a creditor. There are also state laws that are in place regarding debt collection practices, and many of these state laws are very similar to those as outlined by the Fair Debt Collection Practices Act.

To learn more and gain more information about the specific debt collection laws in your state, you can contact the state attorney’s general office with any questions you may have.

How to Get Help

If you think a debt collector or collection agency has broken the law while trying to collect a debt, you can:

Complain to the CFPB and your state attorney general, and/or

Contact a consumer law attorney. You may be entitled to damages and/or attorney’s fees.

Whenever you’re dealing with debt, it’s smart to review your credit reports for accuracy, as errors can unnecessarily damage your credit standing. You can learn more about how to dispute credit report errors here.

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