Credit collection agencies are organizations that collect debts owed to others or debts purchased from creditors. The Fair Debt Collection Practices Act (FDCPA) is enforced by the Federal Trade Commission (FTC), and governs what credit collection agencies can and cannot do during the debt collection process.
Contact
Credit collection agencies can legally contact you between the hours of 8 a.m. and 9 p.m., but cannot call you at inconvenient times or places unless you agree to it, according to the FTC. For instance, if you tell a collection agency not to contact you at work and that you are not allowed to receive calls there, the collector must stop calling you at work. The only people that a collection agency may discuss your debt with are you, your spouse or your attorney. However, collection agencies may contact others to find out where you live, your phone number or where you work.
Validation
Collection agencies must send you a written notice describing how much you owe and the name of the creditor to which you owe money to within five days of first contacting you. They also must give you instruction as to how you should proceed if you do not think you owe that debt.
False Statements
Giving false statements, such as claiming to be attorneys, stating you have committed a crime, stating you owe a false amount, sending you documents that look like legal forms, or stating that you will be arrested if you do not, all forms of harassment and are prohibited according to the FDCPA.
Unfair Practices
Collections agencies cannot collect interest, fees or charges in excess of what you owe unless your state law allows this charge or if the contract from this debt states that they can add these charges to the original debt amount. The FDCPA also prohibits them from depositing post-dated checks early, threatening you that they will seize property without the legal requirements to do so, or contacting you via postcard which displays personal and confidential information about you or your debt.
Legal Action
If you do not pay the debt that you owe, a collection agency can legally take you to court and sue to seek a judgment against you. A judgment allows the creditor to obtain a garnishment order against you either from your bank or in the form of a wage garnishment, resulting in funds being withheld from your paycheck to pay the collection agency.
Member Comments