Federal Fair Debt Collection Practices Act

Debt collectors push for better communication opportunities

It's a blueprint, laying out how debt collectors believe they should be able to operate, and in it, proposed updates to current laws which balance the roles between consumers and collectors.

"There's mountains of unpaid consumer debt that businesses are trying to collect," said Association of Credit and Collection Professionals Public Affairs Director Mark Schiffman.

In an effort to modernize the nation's debt collection system, taking into account shifts in communication technologies and social media, collection agencies are wanting to shift as well, by calling your cell phone and even sending you an e-mail.

"This isn't telemarketing. This is collecting on debts that someone has incurred," said Schiffman.

It's a push from the Association of Credit and Collection Professionals and supported by the Associated Collectors of Mississippi. The Fair Debt Collection Practices Act currently in place limits how collectors operate, and with more and more folks ditching those landlines, Schiffman says it's time to update.

"The laws themselves are fairly unclear in how they treat these new technologies so what we're primarily seeking is clarity so that we make sure we're using them correctly," said Schiffman.

Collectors would only be able to e-mail and call a cell phone if the consumer provides the information on any type of credit or loan application, and in most cases that contact information is required.

While Schiffman agrees most people cringe at the thought of a debt collector. He says the system plays a critical role in the economy. According to the Federal Reserve in 2010, the total amount of consumer debt in the United States was more than $2.45 trillion, with an average credit card debt per household of more than $16,000.

"If you look at it in Mississippi, I'm sure there are businesses in the state that rely on the work of third party debt collectors to recover consumer debt," said Schiffman.

The blueprint also addresses the need for auto dialing, better litigation practices and improving debt documentation.

"I can't imagine that anybody wants to be contacted by a debt collector for any reason, but the reality is, is that people have incurred debt be that credit that was extended from businesses from Main Street to Wall Street," said Schiffman.

Debt collectors would still be prohibited from harassing, threatening and misidentifying themselves to consumers. Consumers would still be able to tell a collector to no longer call them if they're contacted.

Understanding the Fair Debt Collection Practices Act | Finance ...

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While opting for a loan you may be considering 2 important aspects. First, how you will be repaying the loan -whether you will be able to fulfill the contractual obligation to repay the amount in fixed monthly payments. Second, the nature of the debt collector- debt collectors often tend to catch debtors off-guard to collect pending debts. While not all debt collectors follow underhand tactics, this is still a serious concern for many.

Therefore, to ensure a fair debt collection practice, a federal law known as the FDCPA or The Fair Debt Collection Practices Act has been enacted which governs the actions of debt collectors. Collectors of personal debts have to strictly adhere to this federal law. Personal debts may include auto loans, medical bills, home loans, and credit card accounts.

Features of Fair Debt Collection Practices Act

While debt help services are available for people who need help with managing and repaying debts, the purpose of this federal law is to protect debtors legally. When the creditors use a third party to collect the debt, they have to follow some ground rules set by FDCPA, including the following:

*The debt collector cannot call a third party who does not owe any debt, such as your relatives, friends, neighbors and employers. Co-signers are an exception here.

*The debt collector cannot pose false claims like harming your credit rating and referring the account to an attorney just to intimidate you.

*The debt collector cannot call you at unreasonable times. A call cannot be made before 8:00 AM or after 9:00 PM unless you have given special permission for the debt collector to call you during these hours.

*The debt collector cannot make use of obscene or profane language.

*The debt collector cannot conceal his identity over the phone.

*The debt collector cannot disregard a written request from you to cease further contact.

*The debt collector cannot call you while you are at work, unless approved by your employer.

Apart from these basic restrictions imposed by FDCPA, there are some guidelines that dictate the mode of communication for a debt collector. A debt collector cannot communicate with you via post card or use any symbol or alphabet to indicate their identity. If you are represented by an attorney, the debt collector can only contact your attorney.

Violation of Rules

If your rights have been violated, you can file a lawsuit against the debt collector. You have one year from the date of violation to file the lawsuit. You could receive up to 00 in addition to the attorney’s fees and court costs. These restrictions/guidelines make sure that there is no violation in the contract. It is imperative that parties to a contract get a hold on the rules to avoid any ambiguities.

Fair Debt Collection Practices Act

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Federal Trade Commission Annual Report 2009, Fair Debt Collection Practices Act