What Is the Fair Debt Collection Practices Act?

What Is the Fair Debt Collection Practices Act?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

The Fair Debt Collection Practices Act (FDCPA) is a federal law in the United States that restricts the actions of third-party debt collectors. Its purpose is to eliminate abusive debt collection practices and to protect consumers from deceitful, unfair, and intimidating tactics. The Act applies to personal or household debts, including credit card debt, auto loans, medical bills, student loans, and mortgages. It limits the times and ways a debt collector can contact a debtor and provides the consumer with the right to dispute and seek validation for the debt.

Related Questions

1. What can a consumer do if a collector violates the FDCPA?

If a debt collector violates the FDCPA, a consumer has a right to sue in a state or federal court within one year from the date the law was violated. If the consumer wins, they may recover damages like lost wages, legal costs, and other financial losses.

2. What are the restrictions on when and how a debt collector can contact a debtor?

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Under the FDCPA, a debt collector cannot contact a debtor before 8 am or after 9 pm, unless the debtor agrees to it. They cannot contact at work if the collector knows your employer disapproves, and they can’t harass by repeated phone calls, threats of violence, or obscene language.

3. Can a debtor stop a debt collector from contacting them?

Yes, a debtor can stop a debt collector from contacting them by writing a letter to the collector stating so. After the collector receives the letter, they may not contact the debtor again except to say there will be no further contact, or to notify the debtor that the collector or creditor intends to take specific action.

4. Who enforces the FDCPA?

The FDCPA is enforced by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). They both have the authority to regulate debt collectors and take action against those who violate the FDCPA.

5. How does a consumer dispute a debt under the FDCPA?

If a consumer wants to dispute a debt or require the collector to verify the debt, they should write and mail a letter to the collector within 30 days after first being contacted. The collector must stop collection efforts until it provides verification of the debt to the consumer.