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It's The Law: Federal Law Limits Debt Collector

Question: A bill collector is hounding me at work and at home. He calls me all the time, sends me letters and is making my life miserable. Isn't there a Federal law that limits actions by debt collectors?

Answer: The Fair Debt Collection Practices Act (FDCPA) is a Federal law that provides protection for consumers dealing with debt collectors. Debt collectors subject to the Act are generally people or companies attempting to collect debts for third parties. The law excludes people attempting to collect their own debts and both Federal and state governments.

FDCPA limits actions that can be taken by debt collectors. Telephone contact is generally limited to between 8 am and 9 pm. Once the debt collector knows the consumer is represented by an attorney, communication must be with the attorney unless the attorney is nonresponsive or consents to the debt collector contacting the consumer directly.

Unless the consumer gives permission or the debt collector gets approval from a court, the debt collector may not communicate about collection of the debt with any person other than the consumer, his attorney, a consumer reporting agency, the creditor, attorney of the creditor, or the attorney of the debt collector. If the consumer notifies the debt collector in writing that the consumer refuses to pay a debt or that the consumer wants the debt collector to stop communicating with the consumer, the debt collector must stop communication except to advise the consumer that the debt collector is stopping or to notify the consumer of the next action to be taken by the debt collector.

Debt collectors are specifically barred from harassing or abusing consumers. By statute, harassment or abuse includes use or threat of violence, use of obscene or profane language and continuous telephone calls.

Debt collectors are also prohibited from using any false, deceptive or misleading representation or method in connection with debt collection. The statue lists16 specific false or misleading acts which are prohibited, including falsely claiming communication is from an attorney, stating nonpayment of debt will result in arrest or imprisonment, threatening to take any action that cannot be legally taken or is not intended to be taken and using any false representation or deceptive means. Debt collectors must also disclose in the initial communication that the debt collector is attempting to collect a debt and any information will be used for that purpose.

A good example of false and misleading representation is effort by a debt collector to collect a debt which is barred by the statue of limitations. Counterclaims have also been used in mortgage foreclosure, where the debtor argues the plaintiff does not own and hold the note and mortgage and therefore has no right to collect the debt.

The statute prohibits unfair practices. It provide examples of unfair practices include collecting any interest fee or charge which is not expressly authorized by the agreement creating the debt or permitted by law, depositing or threatening to deposit any post dated check prior to its date and communicating with the consumer regarding a debt by postcard. Debt collectors are also prohibited from using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer, except the debt collector can use its business name if the name does not indicate it is in the debt collection business.

When the debt collector violates the statute, even if the debt is valid, the consumer can pursue the debt collector for any actual damage to the consumer plus additional damages that the court may allow, not to exceed $1,000.00. The consumer can also recover reasonable attorney fees. If the court finds the consumer brought an action in bad faith and for the purpose of harassment, the court can award attorney fees to the debt collector.

FDCPA is a powerful weapon for consumers. If a debt collector chooses to ignore its requirements, it is exposed to substantial liability. You should discuss the facts of your case with an experienced attorney as you may not only be able to stop the harassment, but also may be able to recover damages and fees.

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