The California Fair Debt Collection Practices Act regulates both debt collectors and creditors by prohibiting them from using deceptive, unfair, and abusive collection methods.
The Fair Debt Collection Practices Act (FDCPA) is a federal law prohibiting debt collectors from engaging in abusive or deceptive bill collection practices. Those living in California are also protected by the California Fair Debt Collection Practices Act (CFDCPA), which covers more types of collectors and offers additional protections. If you live in California, you will be protected by both California law and the FDCPA.
This article explains the two sets of debt collection laws, but it focuses on the California Fair Debt Collection Practices Act.
The Federal Fair Debt Collection Practices Act
The federal Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using deceptive and unfair tactics, regulates what time of day debt collectors can contact you, and requires that collectors honor your request not to contact you at specific times or places, among other things. The FDCPA does not eliminate debt, it only governs the way in which debt collectors do business.
The FDCPA only applies to agencies collecting debts on someone else’s behalf. For example, the FDCPA does not apply to a credit card company when it collects on an overdue account, but it does apply if the credit card company hires a collection agency to collect on its behalf.
(To learn more about the protections the FDCPA offers, visit our Illegal Debt Collection Practices topic area.)
The California Fair Debt Collection Practices Act
California residents are not limited to the protections offered by the FDCPA. California sets additional limits on debt collectors through the California Fair Debt Collection Practices Act and protects you from more than just collection agencies. Sometimes the CFDCPA is referred to as the Rosenthal Fair Debt Collection Practices Act (RFDCPA).
If you are struggling to pay your bills, get Nolo's Money Troubles, a comprehensive guide to dealing with debt.
Who Is a Debt Collector under the California Debt Collection Law?
The CFDCPA also regulates agencies that regularly collect debts on others’ behalf. So if a debt collection agency is contacting you because of an overdue credit card, then it has to comply with both the FDCPA and the CFDCPA. However, even though both laws use the term “debt collectors,” California covers more than just collection agencies. A debt collector in California includes original creditors, and some others.
The following debt collectors must comply with the CFDCPA:
- collection agencies
- anyone who collects consumer debts in the regular course of business
- companies who make forms and tools for debt collection
- attorneys and their staff who collect debts (but this requirement comes from another part of California law, not the CFDCPA), and
- original creditors.
Original creditors are included, and they must comply with both the FDCPA and the CFDCPA in California.
The CFDCPA is broader than the FDCPA because in addition to regulating debt collectors, it also covers creditors trying to collect debts on their own behalf. In addition, the CFDCPA requires that most original creditors must comply with the FDCPA. Put simply, original creditors have to comply with both the CFDCPA and the FDCPA in California.
(To learn more about the difference between debt collectors and original creditors, review the What Is the Difference Between a Debt Collector and a Creditor article.)
Debts and Collectors Not Covered by the CFDCPA
The CFDCPA does not apply to every person who is trying to collect a debt in California nor does it apply to every type of debt.
Occasional debt collectors do not need to comply. The CFDCPA only applies when companies ordinarily and regularly collect consumer debts. For example, if you are contacting an acquaintance who owes you money and you don't regularly collect money, then you do not have to comply with the CFDCPA.
Foreclosure may not be covered. If an attorney or mortgage servicer is foreclosing on your home, the CFDCPA does not automatically apply. If you are in this situation and you think the CFDCPA is being violated in a foreclosure, you should consider talking to an attorney familiar illegal debt collection in California.
Applies to consumer credit transactions only. The CFDCPA only applies to debt collectors who are attempting to collect on debts that people incur by borrowing money, buying property, or obtaining services for personal, family, or household needs. This means it probably does not protect you from those collecting debts you incurred while operating your business and, likewise, you don’t need to comply if you are collecting debts owed to you by other businesses.
Debt Collectors Do Not Need to be Licensed in California
California “deregulated” collection agencies in the late 1980s, so debt collectors no longer need to be licensed as debt collectors. The federal government does not have a licensing requirement either. Debt collectors do need a general local business license to operate.
Prohibited Collection Activities Under the CFDCPA
The CFDCPA contains a lengthy list of regulations that apply to debt collector activities. The CFDCPA groups these regulations under the categories listed below. As you read the list, keep in mind that some of the prohibitions appear in both California’s CFDCPA and the federal FDCPA. Also keep in mind that "debt collector" includes an original creditor.
The debt collector cannot use threatening or unlawful conduct. Pay close attention to these regulations if a particularly aggressive debt collector is contacting you, even if these appear to be common sense prohibitions. A debt collector cannot:
- use or threaten to use physical force or criminal tactics to personally harm you, your property, or your reputation
- intimidate you by accusing you of committing a crime for not paying the debt (unless you can actually be charged with a crime for not paying the debt, which is very rare)
- make defamatory statements to someone else, nor threaten to do so
- incorrectly threaten to assign the debt to someone and tell you that you would lose any defense to the debt in the process, or
- threaten to arrest you, seize assets, or garnish your wages, unless it actually plans on taking such an actionand it is legally allowed to do so (in most cases, the collector must sue you and obtain a judgment before taking certain collection actions like garnishing your wages; debt collectors cannot have anyone arrest you except in extremely rare circumstances).
Debt collectors are limited in how they communicate with you. Debt collectors are limited in the things they can say as well as the methods they use to contact you, especially on the telephone.
- A debt collector cannot use obscene or profane language.
- It must disclose its caller identification when it calls you on the phone.
- A collector misrepresent himself or herself in a way that would cause you spend money you wouldn't otherwise have spent, such as for a long-distance telephone call or other similar charges.
- A debt collector cannot call you repeatedly or let your phone ring repeatedly to annoy you.
- A collector cannot harass you by calling frequently, whether on the phone or in person.
Since repeated collection calls are bothersome to most people, you might wonder what the CFDCPA means by “harassment.” Generally, you have to prove a bit more than mild harassment. For example, a few California courts have ruled against people who argued that daily calls from debt collectors amounted to harassing conduct under the CFDCPA. However, those courts did suggest that collectors might violate the CFDCPA if they called multiple times in one day, called your workplace or friends, called at odd hours, or continued to call after you ask them to stop.
A debt collector must protect your privacy. The CFCPA contains a number of regulations intended to protect your privacy, however the CFDCPA does permit the debt collector to report your debts to a credit reporting agency.
- A debt collector can only contact your employer to verify your employment, locate you, verify whether you have health insurance (but only if it is are collecting medical debt and ask your employer in writing), or to garnish your wages (after it gets a judgment against you).
- A collector cannot reveal information about your debt to your family except to your spouse or your parents if you are a minor. A collector can contact your family to locate you, however.
- A collector cannot publish your name in a public list for failing to pay (sometimes called a “deadbeat list”).
- If a debt collector sends you mail, the envelope can only contain names and addresses; it cannot contain any information about the debt that is intended to embarrass you. A collector cannot send you postcards.
Debt collectors cannot misrepresent themselves.
- Debt collectors cannot claim to be someone other than who they are or who they are collecting the debt for. They also cannot represent themselves as anything other than debt collectors.
- They cannot say they are attorneys if they aren’t attorneys, they cannot use stationary that includes an attorney's name on it unless it’s actually a law firm sending the letter, and they can’t threaten you with a lawsuit unless they actually intend to file one.
- Unless they are actually trying to collect debts for the government, they can’t make it appear that they are acting under the government’s authority.
- Unless they are legally entitled to by law or by an agreement you made with them, they can’t say that they will charge you additional collection or attorneys' fees.
- They can’t represent themselves as credit reporting agencies or say they are going to report you to a credit reporting agency if they have no intention of doing so.
- A letter cannot appear to come from a claim, credit, audit, or legal department unless it actually is being sent by one of those departments.
No contact if you are represented by an attorney. If your attorney agreed to talk to creditors on your behalf and sent written notice to them, then debt collectors are prohibited from contacting you (other than sending you account statements). The debt collectors can, however, resume contacting you if the attorney does not return their calls or refuses to discuss the matter with them.
Debt collectors must respect the judicial process. Everyone has to respect judicial proceedings, but the CFDCPA includes some specific additional requirements for debt collectors.
- A debt collector must serve you with notice of a lawsuit if it sues you. And if it gets a default judgment against you because it failed to serve you with notice of the lawsuit, it is prohibited from trying to collect on that judgment.
- A collector can only sue you in the county where you: incurred the debt, lived when you incurred the debt, or live now.
- The debt collector must not send you a document that appears to have been issued, authorized, or approved by a government agency or attorney when it wasn’t. In fact, if the debt collector does this he or she could be convicted of a criminal misdemeanor.
What You Can Do If a Debt Collector Violates the CFDCPA
If you believe a debt collector or creditor violated the CFDCPA, you can take the following actions:
File a Complaint With the California Attorney General
If you believe a debt collector violated the CFDCPA, then you can file a complaint with the California Attorney General's Public Inquiry Unit. Although the Attorney General won't sue on your behalf, it might contact thecollection agency and forward a copy of your complaint. (You can find the Attorney General's consumer protection website at http://oag.ca.gov/consumers.)
Contact the Federal Trade Commission
The Federal Trade Commission (FTC) enforces the FDCPA. You can contact them online at the FTC Complaint Assistant.
Sue the Debt Collector
California no longer licenses debt collectors and generally does not go after a debt collector for violations of the CFDCPA. However, you can sue the collector in court. If you win, you can recover actual damages you incurred because the debt collector violated the CFDPCA. In addition, if the debt collector acted “willfully and knowingly,” a court must award you an additional $100 to $1,000. Finally, the court must also award attorneys’ fees to you.
Keep in mind that the debt collector can avoid any liability if it is possible for him or her to cure the violation. The debt collector has to do so within fifteen days of discovering that his or her breach of the CFDCPA can be cured. If you have actual damages, such as emotional damages, however, it is unlikely that the debt collector can cure the breach.
Getting More Information
You can find the full text of the California Fair Debt Collection Practices Act in the California Civil Code starting at § 1788. (To learn how to find state statutes, visit Nolo’s Legal Research Center.)