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Fair Debt

Collection

I

f you use credit cards, owe money on a

personal loan, or are paying on a home

mortgage, you are a debtor. If you fall

behind in repaying your creditors, or an

error is made on your accounts, you may

be contacted by a debt collector.

You should know that in either situation,

the Fair Debt Collection Practices Act

requires that debt collectors treat you fairly

and prohibits certain methods of debt

collection. Of course, the law does not

erase any legitimate debt you owe.

This brochure answers commonly asked

questions about your rights under the Fair

Debt Collection Practices Act.

What debts are

covered?

Personal, family, and

household debts are

covered under the Act.

This includes money owed for

the purchase of an automobile,

for medical care, or for charge accounts.

Who is a debt collector?

A debt collector is any person who regularly collects debts owed to others. This

includes attorneys who collect debts on a

regular basis.

How may a debt collector

contact you?

A collector may contact you in person, by

mail, telephone, telegram, or fax. However, a debt collector may not contact you

at inconvenient times or places, such as

before 8 a.m. or after 9 p.m., unless you

agree. A debt collector also may not contact you at work if the collector knows that

your employer disapproves of such contacts.

Can you stop a debt collector

from contacting you?

You can stop a debt collector from contacting you by writing a letter to the collector

telling them to stop. Once the collector

receives your letter, they may not contact

you again except to say there will be no

further contact or to notify you that the debt

collector or the creditor intends to take

some specific action. Please note, however,

that sending such a letter to a collector does

not make the debt go away if you actually

owe it. You could still be sued by the debt

collector or your original creditor.

May a debt collector contact

anyone else about your debt?

If you have an attorney, the debt collector

must contact the attorney, rather than you.

If you do not have an attorney, a collector

may contact other people, but only to find

out where you live, what your phone

number is, and where you work. Collectors

usually are prohibited from contacting such

third parties more than once. In most cases,

the collector may not tell anyone other than

you and your attorney that you owe money.

What must the debt collector

&UHGLW

Facts

for Consumers

PAST DUE

Federal Trade Commission

Bureau of Consumer Protection

Office of Consumer & Business Education

1-877-FTC-HELP www.ftc.gov

March 1999 2
use any false or misleading statements

when collecting a debt. For example, debt

collectors may not:

● falsely imply that they are attorneys or

government representatives;

● falsely imply that you have committed a

crime;

● falsely represent that they operate or

work for a credit bureau;

● misrepresent the amount of your debt;

● indicate that papers being sent to you

are legal forms when they are not; or

● indicate that papers being sent to you

are not legal forms when they are.

Debt collectors also may not state that:

● you will be arrested if you do not pay

your debt;

● they will seize, garnish, attach, or sell

your property or wages, unless the

collection agency or creditor intends to

do so, and it is legal to do so; or

● actions, such as a lawsuit, will be taken

against you, when such action legally

may not be taken, or when they do not

intend to take such action.

Debt collectors may not:

● give false credit information about you

to anyone, including a credit bureau;

● send you anything that looks like an

official document from a court or

government agency when it is not; or

● use a false name.

Unfair practices. Debt collectors may not

engage in unfair practices when they try to

collect a debt. For example, collectors may

not:

● collect any amount greater than your

debt, unless your state law permits such

a charge;

● deposit a post-dated check prematurely;

● use deception to make you accept

collect calls or pay for telegrams;

● take or threaten to take your property

unless this can be done legally; or

● contact you by postcard.

What control do you have over

payment of debts?

If you owe more than one debt, any payment you make must be applied to the debt

you indicate. A debt collector may not

apply a payment to any debt you believe

you do not owe.

What can you do if you believe a

debt collector violated the law?

You have the right to sue a collector in a

state or federal court within one year from

the date the law was violated. If you win,

you may recover money for the damages

you suffered plus an additional amount up

to $1,000. Court costs and attorneys fees

also can be recovered. A group of people

also may sue a debt collector and recover

money for damages up to $500,000, or one

percent of the collectors net worth, whichever is less.

Where can you report a debt

tell you about the debt?

Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money

you owe; the name of the creditor to whom

you owe the money; and what action to

take if you believe you do not owe the

money.

May a debt collector continue to

contact you if you believe you

do not owe money?

A collector may not contact you if, within

30 days after you receive the written notice, you send the collection agency a letter

stating you do not owe money. However, a

collector can renew collection activities if

you are sent proof of the debt, such as a

copy of a bill for the amount owed.

What types of debt collection

practices are prohibited?

Harassment. Debt collectors may not

harass, oppress, or abuse you or any third

parties they contact. For example, debt

collectors may not:

● use threats of violence or harm;

● publish a list of consumers who refuse

to pay their debts (except to a credit

bureau);

● use obscene or profane language; or

● repeatedly use the telephone to annoy

someone.

False statements. Debt collectors may not

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collector for an alleged

violation?

Report any problems you have with a debt

collector to your state Attorney Generals

office and the Federal Trade Commission.

Many states have their own debt collection

laws, and your Attorney Generals office

can help you determine your rights.

You can file a complaint with the FTC by

contacting the Consumer Response Center

by phone, toll-free at 1-877-FTC-HELP

(382-4357); by TDD: 202-326-2502; by

mail: Consumer Response Center, Federal

Trade Commission, Washington, DC

20580; or by e-mail: use the complaint

form at www.ftc.gov. Although the FTC

generally cannot intervene in individual

disputes, the information you provide may

indicate a pattern of possible law violations

requiring action by the Commission.

The Federal Trade Commission publishes a

series of free, credit-related publications,

including: Knee Deep in Debt, Fair Credit

Reporting, and How to Dispute Credit

Report Errors. For a complete list of FTC

consumer publications, ask the Consumer

Response Center for Best Sellers. You also

can visit us at www.ftc.gov.

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