Fair Debt Collection Practices Act in California

The Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §§ 1692 and following (2024)) 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 (2024)), 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.

What Is the Federal Fair Debt Collection Practices Act?

Among other things, this federal law:

• 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 to stop contacting you.

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.

How Do California's Fair Debt Collection Laws Compare to the Federal Fair Debt Collection Practices Act (FDCPA)?

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) (2024).)

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.

Mini-Miranda Requirement Under the Federal FDCPA

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) (2024).)

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) (2024).)

Who Is Regulated by California's Fair Debt Collection Laws?

Under the Rosenthal Act, the term "debt collector" includes:

• original creditors
• collection agencies
• 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(c) (2024).)

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) (2024).)

Who Isn't Regulated by California's Fair Debt Collection Laws?

The Rosenthal Act doesn't apply to every person trying to collect a debt in California or all kinds of debt.

Occasional Debt Collectors Don't Have to Comply

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 (2024).)

The Law Applies to Consumer Debt and Consumer Credit Transactions

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 (2024).)

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.

Foreclosure Is Probably Covered

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) (2024).) (See Best v. Ocwen Loan Servicing, LLC, 2021 WL 2024716 (Cal Court of Appeal, May 21, 2021)).

What Are the Prohibited Debt Collection Practices Under California Law?

The Rosenthal Act contains a lengthy list of regulations prohibiting certain debt collection activities, including the following.

Using Threats or Intimidation

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 is legally allowed to do so. (In most cases, a collector must sue you and get a judgment before taking specific collection actions, like garnishing your wages.) (Cal. Civ. Code § 1788.10 (2024).)

Harassing You

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 (2024).)

Trying to Trick You 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 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 is from one of those departments. (Cal. Civ. Code § 1788.13 (2024).)

Calling You at Work

The Rosenthal Act contains several 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 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 (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 (2024).)

Contacting You 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, the collector may contact you. (Cal. Civ. Code § 1788.14 (2024).)

What Are the Requirements for Debt Collectors Under California Law?

The Rosenthal Act also describes specific actions collectors must take, such as the following.

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 (2024).)

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 (2024).)

Disclosure Requirement for Time-Barred Debts

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. (Cal. Civ. Code § 1788.52(d)(2) (2024).)

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 (2024).)

The law also bans collectors from actually filing a lawsuit or initiating arbitration or any other legal proceeding to collect a time-barred debt.

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 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 (2024).)

What Are Your Rights If a Debt Collector Is Harassing You?

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.

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.

The Attorney General's office also provides helpful information about debt collectors for the public.

Filing a Complaint With the Federal Trade Commission

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 (2024).)

Filing a Complaint With the Consumer Financial Protection Bureau

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.

Filing a Lawsuit to Enforce California's Fair Debt Collection Laws

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 (2024).)

Your claim is subject to a one-year statute of limitations. (Cal. Civ. Code § 1788.30 (2024).) 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 (2024).) However, if you have actual damages, it's unlikely that the debt collector can correct the violation.

What Are the Penalties for Violating California's Fair Debt Collection Laws?

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. §â€¯1692k (2024).)

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 (2024).) 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 (2024).)

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 (2024).) But 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. However, if you have actual damages, such as emotional damages, it's unlikely that the debt collector can cure the breach.

What Are Your Rights If a Debt Collector Is Suing You?

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.

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.

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.

California Debt Settlement Laws

The California Fair Debt Settlement Practices Act (Cal. Civ. Code § 1788.300, and following (2024)), effective January 1, 2022, provides protections to consumers who hire someone to provide debt settlement services by:

• requiring certain disclosures
• 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 About Your Rights Under California's Debt Collection Laws

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.