A Guide to the FDCPA

    People get into loan troubles for various reasons. Some people fall victim to some kind of scam, some people run into serious credit card debts, and yet, some people are facing foreclosure problems due to the current economic crisis. To deal with the situation, the government has enacted laws to protect consumers and the Fair Debt Collection Practices Act (FDCPA) was passed to do just that. The FDCPA creates guidelines that define how debt collectors can go about collecting their debts to ensure that consumers don’t end up suffering from extreme harassment because of overzealous collectors, especially if they’re innocent victims of some scam.

    The FDCPA defines a debt collector as anyone “who uses any instrument of interstate commerce or the mail in any business, the principal purpose of which is to collect debts, or who regularly collects or attempts to collect debts owed to them or due or asserted to be owed or due another.” In other words, anyone who sends out notices to collect debt or who regularly tries to collect debts has to follow the FDCPA. Violations are harshly punished. It’s important to note that debts owed by businesses do not fall under the Act’s coverage.

    The Act also establishes rules of conduct. For instance, a collector can only call someone’s house phone between 8 AM and 9 PM local time. They have to cease communication with consumers beyond litigation if they receive a written request. Debt collectors cannot call a house over and again with the intent to annoy. Consumers may not be contacted at their placement of employment. Also, debt collectors cannot contact someone who has an attorney because the person is being represented by the attorney.

    There are also some things that debt collectors must do. They must identify themselves to the consumer, identify the name and address of the original creditor, notify the consumer of their right to dispute that they owe a debt, and they must also provide verification of the debt. Debt collectors must also file all lawsuits within the proper venues. However, consumers may also file lawsuits in state or federal court against debt collectors, if they wish.

    Enforcement of the FDCPA is done by the FTC, the Federal Trade Commission. Recently, there have been pushes to have a new agency, the Consumer Financial Protection Agency, to be put in charge. The FDCPA has received criticism for not going far enough to protect consumers from debt collectors. The original 1977 version of the law has not kept up with inflation so the damages that can be awarded to consumers represent only a fraction of what it should be. The credit industry has also complained that the FDCPA allows consumers to file frivolous lawsuits that cost them money and impede their ability to collect debts.

    Every year, there is an annual report of the FDCPA’s findings, which is a publication that summarizes the year’s enforcement activities. It also supplies Congress with details of consumer complaints and debt collector violations. The FTC actually receives more complains about debt collectors than they do about anything else, which explains the need for the Act in the first place.

    For more information on the FDCPA, refer to the following sites:

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