The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits debt collectors from engaging in abusive or deceptive bill collection practices. Maryland also has its own law that protects consumers from deceptive and abusive behavior by people and businesses collecting debts. This law, the Maryland Consumer Debt Collection Act (MCDCA), adds significant protections to consumers because it covers activity by both debt collectors and creditors (in most situations, the FDCPA only covers debt collectors). If you live in Maryland, you are protected by both the FDCPA and the Maryland fair debt collection laws.
This article explains the specific debt collection protections for people who live in Maryland.
The FDCPA protects consumers who owe money to merchants, credit card companies, or others for household debts. It prevents debt collection agencies from using intrusive or deceptive practices when collecting debts. If a bill collector violates the FDCPA, the debtor can bring a lawsuit seeking damages. (To learn more about the FDCPA, visit our Illegal Debt Collection Practices topic area.)
Keep in mind, however, that the FDCPA does not erase the debt, nor does it restrict the creditor’s options for taking legal action.
Maryland’s Consumer Debt Collection Act
Maryland has also enacted laws that protect consumers from abusive and deceptive debt collection tactics. In many ways, the Maryland law is similar to the FDCPA. But it also offers additional protection to consumers. For example, it covers creditors as well as debt collectors. In addition, the Maryland consumer protection scheme requires that collection agencies be licensed and regulated by a state board.
Which Debts and Collectors Are Covered by the Maryland Debt Collection Act?
The Maryland Consumer Debt Collection Act (MCDCA) restrictions apply broadly to any collector. A collector is “a person collecting or attempting to collect an alleged debt arising out of a consumer transaction.” Unlike the FDCPA, which only applies to people in the business of debt collection (with a few exceptions), the MCDCA covers individuals, estates, or any kind of business or legal entity. This means that any person or business seeking payment (such as a creditor), as well as any collection agency or lawyer hired to collect a debt, must comply with the MCDCA.
The Maryland Act covers activity related to the collection of a debt resulting from any transaction involving a person seeking or acquiring “real or personal property, services, money, or credit for personal, family, or household purposes.” This includes most consumer debts, such as credit card bills, charge card accounts, car payments, consumer leases, and mortgages.
Prohibited Activities Under the MCDCA
The Maryland Act prohibits the following activities:
Collectors may not intimidate a debtor by:
- threatening force or violence
- threatening to disclose information that would negatively affect any debtor’s reputation for creditworthiness if the collector knows that the information is false
- threatening criminal prosecution
- using abusive language, including obscenity or profanity, when communicating with debtors or their relatives, and
- communicating with debtors or their relatives frequently, at unusual hours, or in any way that could be considered harassment or abuse.
Collectors may not threaten to communicate with a third party, such as an employer, to undermine the debtor’s reputation. Nor may the collector or creditor contact the debtor’s employer unless the collector has a final court judgment confirming that the debt is owed.
There are a few instances when the creditor or collector may communicate with a third party. A collector may contact the debtor’s spouse or, if the debtor is a minor, the debtor’s parents. A collector may also contact a third party who has a legitimate business reason to know about the debt, such as someone who has guaranteed the debt.
A collector or creditor may not try to trick anyone into paying a debt. In particular, it:
- must not claim it has a right that it knows does not exist or attempt to enforce such a fictional right, or
- must not send any written communication that imitates any form of judicial process from a court, government entity, or lawyer.
Enforcement of the MCDCA
If a collector deliberately discloses information about the debtor that he or she knows is false, the debtor can sue for the damages suffered because of the collector’s action. Under the Maryland law, the debtor must prove that the collector knew the information was false. This differs from the FDCPA, which only requires a debtor to show that the debt collector violated the Act.
Under the MCDCA, a debtor can sue for actual damages. The Act doesn’t mention punitive damages, but does say the debtor can get damages for “emotional distress or mental anguish.” This is a high standard, however, that requires the debtor to show that the collector’s actions were “extreme and outrageous.”
If the consumer seeks less than $5,000, he or she can sue in small claims court which means the consumer does not need an attorney. (Visit our Small Claims Court Center to learn more about bringing a small claims court action.) The Maryland government may also take action against a collector who violates the MCDCA. A debtor does not have to coordinate with any state agency in seeking damages from a collector.
A collection agency can lose its license for violating the MCDCA.
Getting More Information
You can find the full text of the Maryland Act at MD COML §§ 14-201-204. (To learn how to find state statutes, visit Nolo’s Legal Research Center.)
If you are struggling to pay your bills or have delinquent debts, visit our Debt Management area.