The Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §§ 1692 and following) is a federal law that governs how debt collectors may try to get you to pay a debt. Among other things, the FDCPA:
forbids debt collectors from using deceptive and unfair tactics
regulates what time of day debt collectors can contact you, and
requires that collectors honor a request not to contact you.
The FDCPA applies to agencies collecting debts for someone else and sometimes to debt buyers. So, the FDCPA wouldn't apply to a credit card company when it collects on an overdue account. But it would apply if the credit card company hired a collection agency to collect on its behalf.
Those living in California are also protected by the Rosenthal Fair Debt Collection Practices Act (Cal. Civ. Code §§ 1788 to 1788.33), which covers more types of collectors and offers additional protections to consumers. If you're a California resident and a collector violates the Rosenthal Act, you could file a complaint with various governmental entities, file a lawsuit against the collector in court, or use violations of the law as leverage in settling your debt.
How California's Debt Collection Law Differs From Federal Collections Law
While the federal FDCPA applies to debt collectors and sometimes debt buyers—but not original creditors—California law extends the protection to creditors and others.
Under the Rosenthal Act, the term "debt collector" includes:
anyone who collects consumer debts in the regular course of business, and
anyone who makes and sells forms, letters, and other collection media for debt collection. (Cal. Civ. Code § 1788.2).
Incorporating Federal Law Into California's Law
The Rosenthal Act also requires that original creditors comply with most parts of the federal FDCPA. (Cal. Civ. Code § 1788.17). So, in California, original creditors have to comply with both the Rosenthal Act and the FDCPA. If, for instance, a credit card company contacts you about an overdue bill, it must follow both the FDCPA and the Rosenthal Act.
The Rosenthal Act contains two significant exceptions for when a creditor doesn't have to comply with the FDCPA: creditors don't have to provide consumers with a "mini-Miranda" notice, and they don't have to send consumers a debt validation notice.
Debts and Collectors Not Covered by California's Debt Collection Law
The Rosenthal Act doesn't apply to every person trying to collect a debt in California, nor does it apply to all kinds of debt.
Occasional debt collectors don't have to comply. The Rosenthal Act applies only when people and companies ordinarily and regularly collect consumer debts. For example, say you're contacting an acquaintance who owes you money, but you don't regularly collect money. You don't have to comply with the Rosenthal Act. (Cal. Civ. Code § 1788.2).
The law applies to consumer credit transactions only. The Rosenthal Act applies to debt collectors attempting to collect on debts that people incur by borrowing money, buying property, or obtaining services for personal, family, or household needs. (Cal. Civ. Code § 1788.2). So, it probably doesn't protect you from those collecting debts you incurred while operating your business. Likewise, you don't need to comply if you're collecting debts owed to you by other businesses.
Prohibited Collection Activities Under the Rosenthal Act
The Rosenthal Act contains a lengthy list of regulations that apply to debt collection activities, like the following.
Can a Collector Threaten Me Personally? Or Threaten to Have Me Arrested?
Under California law, a debt collector can't make any of the following threats.
Use or threaten to use physical force or criminal tactics to harm you, your property, or your reputation.
Intimidate you by accusing you of committing a crime by not paying the debt—unless you can be charged with a crime for not paying, 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.
Threaten to arrest you, seize assets, or garnish your wages, unless the collector actually plans on taking such an action and it is legally allowed to do so. (In most cases, a collector must sue you and obtain a judgment before taking certain collection actions, like garnishing your wages.) (Cal. Civ. Code § 1788.10).
Can a Debt Collector Use Obscene Language or Harass Me?
Debt collectors are limited in what they may say, as well as the methods they may use, to contact you—especially on the telephone.
A debt collector can't use obscene or profane language.
A caller must disclose their identity when calling you on the phone.
A collector can't misrepresent themself in a way that would cause you to spend money you wouldn't otherwise have spent, like for a long-distance telephone call or other similar charges.
A debt collector can't call you repeatedly or let your phone ring repeatedly to annoy you.
A collector can't communicate with you with such frequency as to constitute harassment, whether on the phone or in person. (Cal. Civ. Code § 1788.11).
Debt Collectors Must Tell You If the Statute of Limitations Has Expired
The Rosenthal Act requires a debt collector to inform you if the statute of limitations for a particular debt has passed. The collector has to include the notice in the first written communication it sends you after the statute of limitations expires. (Cal. Civ. Code § 1788.14).
The law also bans collectors from filing a lawsuit or initiating arbitration or any other legal proceeding to collect a time-barred debt. (Cal. Civ. Proc. Code § 337).
Can a Debt Collector Call Me at Work?
The Rosenthal Act contains a number of regulations requiring debt collectors to protect your privacy.
A debt collector may contact your employer, but only to verify your employment, locate you, find out if you have medical insurance (in the case of a medical debt), or to garnish your wages after getting a judgment against you.
A collector can't reveal information about your debt to your family except to your spouse or your parents if you're a minor (or if you live in the same household). A collector can contact your family to locate you, though.
A collector can't publish your name in a public list (known as a "deadbeat list") for failing to pay.
If a debt collector sends you mail, the envelope can't show any information about the debt that's intended to embarrass you. It may show only the name, address, and telephone number of the debtor and the debt collector. A collector can't send you postcards. (Cal. Civ. Code § 1788.12).
Can a Debt Collector Try to Trick Me Into Paying a Debt?
Collectors also can't do any of the following.
Say they're lawyers if they aren't, use letterhead that includes a lawyer's name unless the letter is from a law firm or a lawyer approves the letter, or threaten you with a lawsuit unless they intend to file one.
Make it appear that they're acting under the government's authority unless they're trying to collect debts for the government.
Say that they'll charge you additional collection or attorneys' fees unless they're legally entitled to by law or by an agreement you made with them.
Represent themselves as a credit reporting agency, or say they're going to report you to a credit reporting agency if they have no intention of doing so.
Send a letter that appears to come from a claim, credit, audit, or legal department unless it actually is from one of those departments. (Cal. Civ. Code § 1788.13).
No Contact If You Have a Lawyer
If your lawyer agreed to talk to creditors on your behalf and sent written notice to them, then debt collectors can't contact you. But if the lawyer fails to answer the collector's correspondence, return telephone calls, or discuss the obligation in question, then the collector may contact you. (Cal. Civ. Code § 1788.14).
Debt Collectors Have to Respect the Judicial Process
While everyone should respect judicial proceedings, California law imposes some specific additional requirements for debt collectors.
A debt collector has to serve you with notice of a lawsuit if it sues you. And if the creditor gets a default judgment, it can't collect or attempt to collect the debt if it knows that you weren't legally served.
A collector can sue you only in the county where you incurred the debt, lived when you incurred the debt, or live now. (Cal. Civ. Code § 1788.15).
Making a Complaint Against a Collector
If you think a debt collector is harassing you in violation of California law, you can submit a complaint to the California Attorney General, the Federal Trade Commission, and the Consumer Financial Protection Bureau.
Filing a Complaint With the California Attorney General
If you believe a debt collector violated the Rosenthal Act, you may file a complaint with the California Attorney General's office. Although the Attorney General won't sue on your behalf, it uses complaints to learn about misconduct.
You may sue the collector in court. If you win, you can recover any actual damages you incurred because the debt collector violated the law. Also, under California law, if the debt collector acted "willfully and knowingly," a court can award you an additional $100 to $1,000. Finally, you can get an award of attorneys' fees. (Cal. Civ. Code § 1788.30).
Your claim is subject to a one-year statute of limitations. (Cal. Civ. Code § 1788.30). Also, sometimes, a court will reduce the amount it awards you by the amount you owe to the creditor.
In most cases, you'll need a lawyer's help to file and win a lawsuit; but if you're confident in your knowledge of the law and legal procedures, you may file a suit in small claims court on your own. Also, be aware that a debt collector isn't liable for a violation of the law if, within 15 days either after discovering a violation that can be cured, or after receiving a written notice about the violation, the debt collector notifies you of the violation, and corrects it. (Cal. Civ. Code § 1788.30). Though, if you have actual damages, it's unlikely that the debt collector can correct the violation.
Using the Violation as Leverage in Debt Settlement Negotiations
If you're trying to settle a debt and the collector violates the Rosenthal Act, you can use the violation as leverage in your negotiations. Collectors know that a lawsuit can be costly to defend and might result in a judgment against them.
Just how much leverage you'll get from the threat of a lawsuit depends on the strength of your case. If you have strong facts proving a violation—such as many instances of harassing phone calls or the testimony of coworkers who received threatening phone calls—you'll have much more leverage in your debt settlement negotiations.
prohibiting some practices (like engaging in false, deceptive, or misleading acts or practices)
giving cancellation rights, and
allowing a private right of action if the debt settlement company violates the law.
Talk to a Lawyer
This article provides details on collection laws in California, with citations to statutes so you can learn more. Statutes change, so checking them is always a good idea. To learn how to find state statutes, visit Nolo's Legal Research Center. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting an attorney.
If you think a debt collector or creditor violated the law when trying to collect a debt from you, consider talking to an attorney who can analyze your situation and advise you about your rights and options under the law. An attorney might also be able to help you to negotiate a debt settlement.