How I Learned So Much about Fair Debt Collection Practices

Early in my business career, I experienced a serious financial setback. A business I owned failed, and I was unable to pay my bills for the first time in my life. First my creditors sent reminder letters and made courtesy calls: “Mr. Epper, it appears you have missed a payment on your credit card bill.”

As time passed, these same creditors resorted to more serious, sometimes even threatening, methods to try to get the money they were owed.

Perhaps you have lost a job or suffered the illness of a family member and ended up without income to pay your bills.

It’s painful and difficult for a proud person to face.

In my case, it took 12 months to get my finances back in order. During that time, I learned quite a bit about how to deal with collectors and collections agencies.

I would like to share a few of the do’s and don’t of dealing with collectors and the federal laws that govern the collection of consumer debts by third party collectors.

The Fair Debt Collection Practices Act: The Federal Law that Covers Some Consumer Debt Collectors

The federal law that governs the collection of consumer debt by third parties (collection agencies or bill collecting companies that have purchased the debt from your original creditor) is called the Fair Debt Collections Practices Act (FDCPA).

Is this the law that applies to your debts?

Because it is a federal law, it applies in all 50 states.

However, keep in mind that the FDCPA does not cover debts incurred by a business. Nor does it cover dealings with a creditor collecting on its own behalf unless that creditor does so doing so using a structure that makes its collections effort appear to be coming from a third party.

For example, the act may apply if the company’s in-house collectors use a different company name when calling or writing to collect the debt. The FDCPA also may cover law firms that derive significant revenues from the collection of debts.

The first thing that you should do if you are receiving collections calls and letters from 3rd party collectors is to read this act for yourself. The full FDCPA is readily available online, and I have provided a link to the act at the end of the article.

Arming yourself with some knowledge of the rules that govern third party collectors is the first step toward putting yourself in a strong position to deal with them.

Financial self help guru and radio talk show host Dave Ramsey tells a joke occasionally on his program about bill collectors. It goes like this: “How do you know that a collector is lying to you?” Answer: “His lips are moving.”

Although I did not find all of the collectors who I dealt with to be untrustworthy, I did experience a fair amount of conduct by bill collectors that I believe fell outside the bounds of the Fair Debt Collection Practices Act.

Reputable collections agencies train their collectors on what this act means and what kinds of collections techniques and practices violate the law. However, not every agency is scrupulous in making certain that their employees understand and abide by the FDCPA.

As a result, I believe consumers are routinely subjected to collections practices that are illegal and that could be grounds for a lawsuit to recover money damages.

I am not an attorney and this article is not intended as legal advice. If you believe a collector has broken the law, your best course of action is to seek the services of a good consumer advocacy law firm in your state.

The Importance of Keeping Written Records of Collection Attempts

The second thing that you should do if you are receiving calls from third party collectors is to begin to keep a written record of the calls. You should also save all of the collection letters and the postmarked envelopes they arrived in.

Your record of the collections activity against you should be kept in a notebook and should include all of the letters and phone calls that you receive. If you are getting calls on a cellular phone, be sure to select a notebook that is small enough to be carried with you.

The record concerning collections calls should include the time and date of every telephone call you make or receive regarding a debt. Each entry should include the name, address, and phone number of the collections agency and the name of the collector with whom you speak. It should also include the client that he is calling on behalf of and the specific debt.

Record as much detail as possible about the nature of the conversation and be as objective as possible in your account.

If a collector violates the FDCPA, the entries in your notebook will be important proof if you decide to take action against the collections agency or bill collector.

Keeping records and gathering information about who the collectors are and for whom they work puts them on notice that you are making a record of their collections attempts and makes them more likely to be careful to obey the law.

Be polite but firm in gathering the answers to these questions. The collectors will not be likely to give you a real name because of the nature of the work they do. Getting a fictitious name or rep number is often enough to document the conduct and to trace it back to a specific collector.

Your Rights and the Required Notice in the First Collection Letter from a Third Party Collector

Typically, when an account of yours is turned over to a third party collector, the collections company will send you a first letter concerning the debt. The FDCPA requires very specific language be included in that letter in a way that is clear and legible.

The first letter from the bill collecting company must advise you of your right to request the name and address of the original creditor and validation of the debt within 30 days of getting the first letter.

The first letter from a third party collector must also advise you that you have 30 days to dispute the debt.

If you make a written request for the original creditors name & address or dispute the debt, the collections agency is required to stop any effort to collect the disputed portion of the debt until they provide you with the name and address of the original creditor.

If you ask for validation of the debt, they must stop collections effort until they provide proof that you owe the debt.

Depending on the reasons for your disputing of the debt, the required proof from the creditor can vary. In some cases, particularly when the debt has been resold several times, it can take the debt collection agency some time to gather this information.

You should not hear from them until they have provided the information that you have asked for unless they made it part of the original letter. If you do, be sure to document it.

When you get the validation, be sure that it is sufficient to show that you owe the debt based upon your reasons for your disputing of it. Is the proof provided sufficient?

The Right Way to Dispute a Debt or Request Original Creditor Information and Validation

If you intend to send such a letter for original creditor information, disputing the debt, or requesting validation, you should keep a copy and send the letter by certified mail with a return receipt requested.

Make certain that your letter to the third party collector is dated and includes enough information to identify the debt that you are disputing or requesting verification of. If you choose not to dispute a debt within 30 days of receiving the first letter, the collector can presume the debt is valid.

However, if the collector persists in trying to collect a debt without providing you the address of the original creditor or proof of validity of the debt when you have asked for them, he has violated the FDCPA. Because many large collections agencies have automated their collection letters, they can violate FDCPA by not carefully tracking your requests for original creditor information or validation of the debt.

In addition to prominently advising you of your right to dispute a debt and to original creditor information, every letter that you receive from a bill collecting agency about a debt they are attempting to collect must contain a very specific language to comply with the Fair Debt Collection Practices Act.

The specific language required is “This is an attempt to collect a debt and any information obtained will be used for that purpose.” You should regard that line as a warning and keep it in mind whenever a collector calls.

Sometimes collectors appear to be making conversation with you. They may ask about your job search and for the name of the company that is your new employer. They are not being friendly; instead, they are gathering information in case they have to sue you and garnish your wages to collect the debt. To do that, they need to know where you work.

Your rule of thumb should be to volunteer as little information as possible in your conversations with any collectors who call. After all, all the information they gather will be used to collect the debt.

Some Key Requirements When You Dispute a Debt

The collections agency must cease collections efforts until they have verified the debt and provided you with the required information about the original creditor. If you receive additional requests or demands to pay the debt before they have provided the requested information, they have violated the FDCPA.

If the collections agency does not ensure that the debt is noted as disputed on your credit report and continues to report your non-payment, you should consult with a consumer protection attorney in your local area about the possible remedies open to you.

Your Rights When Bill Collectors Communicating with You about a Debt

When a third party collector can call:

A third party bill collector may not call you before 8 am or after 9 pm your time zone unless you have given them permission to do so or they have gone to court and secured special permission to call at other times.

According to Section 1692c: “Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, the debt collector may not communicate with a consumer in connection with the collection of a debt – (1) at any unusual time or place or a time or place know or which should be known to be inconvenient to the consumer.”

The same section goes on to specify that in the absence of specific knowledge, the collector must assume the convenient time to be after 8 a.m. or before 9 p.m. in your time zone.

If you have not given a collector special permission to call before or after these hours and you get any collection calls during those hours, you should document them in your record.

If you choose to specify specific times that are convenient to you to receive calls from collectors, you should do so in writing. You should keep a dated copy and use certified mail with return receipt requested to advise the bill collectors so that you can prove when the collectors received your request.

When you have sought the services of an attorney:

The same section specifies that if you have sought representation by an attorney and the bill collector has been notified of that fact, they may not contact you, unless your attorney fails to respond to them in a reasonable time or allows them to speak to you directly.

Section 1692c: (2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the attorney fails to respond with a reasonable period of time to a communications from the debt collector, or unless the attorney consents to direct communication with the consumer;”

If you have chosen to be represented by an attorney to settle your debts and you continue to receive calls or letters from third party collectors after they have been notified of your choice, you should include these contacts in your written record of collection attempts and discuss them with your attorney.

When you are at work:

The FDCPA give consumers protection from being called by third party bill collectors at work.

According to Section 1692c, “Without the prior consent of the consumer given directly to the debt collector or the express permission of a court or competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt—(3) at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.”

If you do not wish to get calls from 3rd part collectors at work, advise any that call you there of your employers policy against such calls. In addition, you should send a certified letter return receipt requested with the same information to the collector so that you can prove that you advised them not to call you at work.

Document any subsequent calls at work in your written record and discuss them with a consumer attorney versed in FDCPA and the local debt collection laws in your state.

Protection for Consumers from Harassment or Abuse by Debt Collectors

The opening words of the FDCPA tell you a lot about the Congressional findings that prompted our national legislature to pass the act.

The lawmakers started the act with these words: “There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.”

To protect consumers in their dealing with 3rd party collectors, the FDCPA defines several kinds of conduct by bill collectors as harassment or abusive and prohibits any conduct “the natural consequences of which is designed to harass, oppress, or abuse any person in connection with the collection of a debt.” (Section 1692d)

This section of the FDCPA also identifies specific conduct that is out of bounds for third party collectors.

As might be expected the act prohibits collectors from any conduct that involves “The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.

In addition, the Fair Debt Collections Practices Act also makes that obscenity filled answering machine message illegal: “[the following conduct is a violation] The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.”

Should you be get a voice mail that uses foul language or abusive language, be sure to save it and make it part of your record of collections activity. If you are represented by a consumer advocate or debt settlement attorney, you should immediately make him or her aware of the message.

The bill collector cannot advertise your debt for sale as a means of forcing you to pay it. Nor can third party collectors call you repeatedly in a short span of time.

Section 1692d specifically forbids third party collectors from “Causing the telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.”

Keeping accurate records of the time and date of repeated calls from the same collector can be important proof of a pattern of collection calls that violate this section of the act.

Also collectors who place calls without “meaningful disclosure of the caller’s identity” [Sec.1692d (6)] can also be violating the provisions of this section. If you are unsure if the conduct of a collector violates the FDCPA or other state law, you should seek the opinion of an attorney who represents consumers in debt matters.

The Full Text of the Fair Debt Collection Practices Act

Read the full text of the Fair Debt Collection Practices Act .

I hope the information in this article has been helpful to you if you are getting collections calls and letters.

When I my business failed and I started getting collections calls for the first time in my life, knowing these things would have been helpful to me and given me a better grasp of how to deal with collection calls.

The collections industry spends lots of money to make sure that their collection agents are expert negotiators. Having professional attorney negotiators on your side can help you level the playing field when you are ready to negotiate a settlement of your debts.

About the author:

Ryan Epper holds a BA from the University of Alabama. He has had a ten year career in mortgage and consumer finance. He is a certified debt negotiator and owner of Northport, Alabama-based Certified Debt, LLC, a debt relief and debt settlement company that specializes in providing consumers with attorney negotiated debt settlements and alternatives to filing bankruptcy in 24 states. Attorney Debt Settlement program in: Alabama ּ Alaska ּ Arkansas ּ Arizona ּ Californiaּ Connecticut ּ Florida ּ Illinois ּ Indianaּ Iowa Louisiana ּ Massachusetts ּ Maryland ּ Michigan ּ Minnesota ּ Missouri ּ Montana ּ Nebraska ּ New Mexico ּ Nevada ּ Oklahoma ּ Oregon ּPennsylvania ּ South Dakota ּ Texas

Can Reach Ryan Epper at 1-877-332-8441