With millions of Americans in debt, debt collection has become a booming industry. In 2004 alone, the debt collection industry made over $16.5 billion in profit. With so much money on the line, debt collection agencies are under a lot of pressure. In some cases, this pressure has resulted in abusive and often aggressive behavior leaving many debtors feeling intimidated.
In order to protect debtors from this type of aggressive behavior, the United States Congress passed several debt collection laws to help keep debt collectors and debt collection agencies in check. The debt collection laws make sure that the growth of the debt collection agency is coupled with the values of good service and integrity.
The primary debt collection law is the Fair Debt Collection Practices Act (FDCPA) of 1977. FDCPA specifies the best practices in which debt collectors must conduct themselves, placing measures prohibiting debt collectors from engaging in certain activities. Some of these measures include the following:
• Violations of your privacy – Debt collectors can only talk to other people for the purpose of finding your current location. They are not allowed to disclose any information regarding an outstanding or the terms of the debt collection process.
• Unfair calls or visits – According to debt collection laws, especially the FDCPA, debt collectors are not allowed to appear at your doorstep whenever they want to. They are only allowed to call or visit between the hours of 8:00 am and 9:00 pm. Debt collectors are also prohibited from appearing at your workplace, especially if you have previously informed them that you are against such visits.
• False Representation – The debt collector cannot intimidate you with false authority; they cannot say that they are a lawyer or lawfirm if they are not. The debt collector cannot inform you that they have the power to personally repossess your things. They also cannot present documents that give the appearance their actions are directed by the US or State Governments.
However, the FDCPA is not the only law that is related to debt collection. Individual states usually have their own debt collection laws that are imposed to provide protection for their residents. For example: in California, debt collection laws require the debtor to keep written records of communications and transactions with the debt collector.
On the other hand, in Pennsylvania the Fair Credit Extension Uniformity Act was passed helping protect debtors from the deceptive behaviors of debt collectors. This act supports the FDCPA and it states that debt collectors CANNOT falsely imply that your inability to pay your debt is a crime. The debt collection laws of Pennsylvania also detail that debt collectors are not allowed to issue false threats of legal action.
All of these debt collection laws at both the Federal and State levels, have one thing in common: they help protect debtors from being abused by eager debt collectors.
Do you have a question about the Fair Debt Collection Practices Act or debt collection laws in your state? Feel free to contact the Stevens-Lloyd Group, Inc today.