Fair Debt Collection Act

There was a time when debt collectors would hound you if you had any outstanding dues with any company. To put a control to this, the Federal Trade Commission (FTC) enforced Fair Debt Collection Practices Act (FDCPA) that safeguards the rights of the debtors. It prohibits debt collecting agencies from using abusive, unfair, or misleading practices to recoup money from the debtors. According to the laws and regulations laid down by the Fair Debt Collection Law, the collection agencies must follow a professional method to collect a debt.

The Fair Debt Collection Practices Act was first passed in 1978. Since then, there have been several modifications made to the Act to meet the changing demands of time. These modifications were made to protect the rights of the debtors and stop the collecting agencies from crossing the line while tracking down the customers for recouping money.

Under FDCPA, a debt collector is regarded as someone who collects debts owed to others. This includes agencies, lawyers and companies that buy bad debts and then try to recoup them. They must exercise professional and fair methods to collect debts. As per the fair debt collection practices, the hours in which companies are allowed to contact debtors are limited. You cannot contact someone before 8 in the morning or after 9 pm. You should also not contact them at work, but in case you do and they ask not to disturb at work, you must abide by it.

Knowing the debt collection act is important for both the collectors as well as the debtors. This ensures that both parties play their part well and get the issue resolved peacefully.

Highlights of the Fair Debt Collection Practices Act:

  • Debt collectors may not harass, oppress, or abuse anyone who owes money
  • Debt collectors may not lie or threaten debtors when trying to collect a debt
  • Debt collectors may not engage in unfair practices (asking for post-dated checks, threaten to take your property or charge interest) when they try to collect a debt