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. 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 FDCPA or 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.
Among other things, this federal law:
The FDCPA applies to agencies collecting debts for someone else (debt collectors) 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.
The federal FDCPA applies to debt collectors and sometimes debt buyers but not original creditors. California's Rosenthal Act applies to original creditors and others (see below). (Cal. Civ. Code § 1788.2(c)).
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 must comply with 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 or send consumers a debt validation notice.
The federal FDCPA says that the collector must disclose in the initial communication that they're attempting to collect a debt and that any information obtained will be used for that purpose. These disclosures are often called the "mini-Miranda." The disclosures must also be included in subsequent communications. (15 U.S.C. § 1692e(11)).
Under a Consumer Financial Protection Bureau rule, effective in late 2021, debt collectors must make the mini-Miranda disclosures in the same language or languages used for the rest of the communication in which the disclosures are conveyed. Collectors don't, however, have to identify which consumers can't communicate in English, nor provide translations in multiple languages. (12 C.F.R. § 1006.18(e)(4)).
Under the Rosenthal Act, the term "debt collector" includes:
Attorneys are subject to the professional standards in California's Business & Professions Code. This law requires lawyers and their staff to comply with the standards of the Rosenthal Act and some of the provisions of the federal FDCPA. (Cal. Bus. & Prof. Code § 6077.5(a)).
The Rosenthal Act doesn't apply to every person trying to collect a debt in California or all kinds of debt.
The Rosenthal Act applies 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 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.
If you're behind on your mortgage payments and facing a foreclosure, the Rosenthal Act most likely applies. In the case of Davidson v. Seterus, Inc., 21 Cal.App.5th 283 (2018), the California Court of Appeal, Fourth District, decided that a servicer attempting to collect a mortgage debt is subject to this law.
In another case, the California Court of Appeal held that the Rosenthal Act can apply to a nonjudicial foreclosure. The Fourth Appellate District noted that, as of January 1, 2020, the Rosenthal Act was amended to state that: "[t]he term ‘consumer debt' includes a mortgage debt." (Civ. Code, § 1788.2 (f)). (See Best v. Ocwen Loan Servicing, LLC, 2021 WL 2024716 (Cal Court of Appeal, May 21, 2021)).
The Rosenthal Act contains a lengthy list of regulations prohibiting certain debt collection activities, including the following.
Under California law, a debt collector can't make any of the following threats.
Debt collectors are limited in what they may say, as well as the methods they may use, to contact you—especially on the telephone.
Collectors also can't do any of the following.
The Rosenthal Act contains several regulations requiring debt collectors to protect your privacy.
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, the collector may contact you. (Cal. Civ. Code § 1788.14).
The Rosenthal Act also describes specific actions collectors must take, such as the following.
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).
Since 2014, debt buyers who try to collect from California residents have had to provide one of the following two notices when the statute of limitations for filing a suit to collect a debt has passed:
The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt collector] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.
The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency. (Civ. Code § 1788.52(d)(2)).
As of January 1, 2019, debt collectors must also send this notice if a debt is time-barred. As noted earlier, the collector has to include the notice in the first written communication sent to the consumer after the statute of limitations passes. (Cal. Civ. Code § 1788.14).
The law also bans collectors from actually filing a lawsuit or initiating arbitration or any other legal proceeding to collect a time-barred debt.
While everyone should respect judicial proceedings, California law imposes some specific additional requirements for debt collectors.
When you fall behind on a bill, you should know your rights. The collector must comply with federal and state debt collection laws. You also have the right to respond to a lawsuit the collector files and hire a lawyer to represent you (see below).
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.
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.
The Attorney General's office also provides helpful information about debt collectors for the public.
You may also file a complaint with the Federal Trade Commission (FTC). Under federal law, the FTC is generally responsible for enforcing the FDCPA. (15 U.S.C. § 1692l).
You may also register a complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB will forward your complaint to the collector and work to get you a response.
In addition to filing complaints against a collector, you can also file a suit against the collector. If you win, you can recover any actual damages you incurred because of the violation. Also, under California law, if the debt collector acted "willfully and knowingly," a court can award you an additional $100 to $1,000. And 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 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.
Generally, a debt collector must comply with both the federal FDCPA and the Rosenthal Act in California. If a bill collector violates the FDCPA, you might be able to sue and recover damages, including statutory damages of $1,000. (15 U.S.C. § 1692k).
The Rosenthal Act states that its remedies are intended to be cumulative and in addition to any other procedures, rights, or remedies under any other provision of law. (Cal. Civ. Code § 1788.32). So, conduct in California that also violates the federal statute might result in remedies under both federal and state law. (Cal. Civ. Code § 1788.17).
Again, under the Rosenthal Act, if the debt collector acted "willfully and knowingly," a court can award you $100 to $1,000 plus attorneys' fees. (Cal. Civ. Code § 1788.30). However, the debt collector can avoid any liability if it's possible to cure the violation. Remember, the debt collector has to do so within 15 days of discovering that the breach can be cured. If you have actual damages, such as emotional damages, however, it's unlikely that the debt collector can cure the breach.
For example, you have the right to file a response (answer) to the suit. You can raise any violations of debt collection laws in your answer and use them to negotiate a settlement of your debt.
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.
Be aware that if a debt is canceled, forgiven, or discharged for less than you owe, the amount of the canceled debt might be taxable. The IRS generally considers canceled debt of $600 or more as taxable, and settling debts for less than what's owed can increase your tax liability depending on your tax bracket and the canceled amount. Consult a tax professional for more information.
The California Fair Debt Settlement Practices Act (Cal. Civ. Code § 1788.300, and following), effective January 1, 2022, provides protections to consumers who hire someone to provide debt settlement services by:
This article provides details on collection laws in California, with citations to statutes, so that you can learn more. Statutes change, so checking them is always a good idea. To learn how to find state statutes, visit Nolo's Laws and 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. So, 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.