If you're dealing with a collector, or have a debt that might soon go to collection, it's important to know what debt collection agencies can and can't do. The federal Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. § 1692 and following) makes certain collection tactics that collection agencies use illegal, like:
contacting third parties about your debt
engaging in conduct meant to harass, oppress, or abuse you, and
lying to you or misleading you.
Below we outline some of the more important of these restrictions so you know what bill collectors can and can't do. Not only can you use your knowledge of these laws to protect yourself from harassment, but if a collector violates one of these laws, you might be able to:
use the violation to negotiate a favorable settlement
FDCPA Applies to Debt Collectors, Not Original Creditors; Sometimes Debt Buyers
The FDCPA applies to debt collectors, but usually not to creditors collecting debts they originated. The law does apply to a creditor that collects its own debts under a different name. The term "debt collector" includes someone who regularly collects debts for others, or whose main business is collecting debts.
Some debt buyers that purchase, and therefore own, the debt they’re trying to collect aren’t subject to the FDCPA. (See Henson et al. v. Santander Consumer USA Inc., 137 S.Ct. 1718 (2017)). But the FDCPA applies to a debt buyer if the business's principal purpose is the collection of debts. (See Tepper v. Amos Financial, LLC, 898 F.3d 364 (3rd Cir. 2018), 12 C.F.R. § 1006.2(i), effective November 30, 2021, see official interpretation).
Also, some states, like California, have laws that restrict what creditors can do when collecting debts.
Illegal Debt Collection Practices Under the FDCPA
The FDCPA requires that a collection agency make specific disclosures and prohibits collectors from engaging in many kinds of abusive or deceptive behavior. Here are some collection actions that the FDCPA prohibits.
Communications With Third Parties
For the most part, a collection agency can't contact third parties about your debt, subject to a few exceptions. Collectors are allowed to contact:
Your attorney. If the collector knows you're represented by an attorney, it must talk to the attorney only, not you, unless you give it permission to contact you or your attorney doesn’t respond to the agency’s communications.
Also, debt collectors are allowed to contact third parties for the limited purpose of finding information about your whereabouts. In these contacts, collectors:
must state their name and that they're confirming location information about you
can't identify their employer unless asked
can't state that you owe a debt
can't contact a third party more than once unless required to do so by the third party, or unless they believe the third party’s earlier response was wrong or incomplete and that the third party has correct or complete information
can't communicate by postcard
can't use any words or symbols on the outside of an envelope that indicate they are trying to collect a debt (including a business logo or letterhead) if either would give away the purpose of the letter, and
can't call third parties for location information once they know an attorney represents you.
Communications With You
A debt collector’s first communication with you must tell you that they're attempting to collect a debt and that any information obtained from you will be used for that purpose. These disclosures are often called a "mini-Miranda" and must also be included in subsequent communications. (Also, in later communications, the collector must tell you his or her and the collection agency’s name.)
Under a Consumer Financial Protection Bureau rule, effective in late 2021 (see below), 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.
A collector can't contact you:
at an unusual or inconvenient time or place—calls before 8 a.m. and after 9 p.m. are presumed to be inconvenient, but if you work nights and sleep during the day, a call at 1 p.m. might also be inconvenient
directly, if it knows or should have known that you have an attorney, or
at work if it knows that your employer prohibits you from receiving collections calls at your place of employment. If you're contacted at work, and you're not allowed to have personal calls there, tell the collector that your boss prohibits such calls.
Harassment or Abuse
In general, a collection agency can't engage in conduct meant to harass, oppress, or abuse. Specifically, it can't:
use or threaten to use violence
harm or threaten to harm you, another person, or your or another person’s reputation or property
use obscene, profane, or abusive language
publish your name as a person who doesn’t pay bills (child support collection agencies are exempt from this restriction in some states)
list your debt for sale to the public
call you repeatedly, or
place telephone calls to you without identifying the caller as a bill collector.
False or Misleading Representations
A collection agency can’t lie. For example, it can’t:
claim to be a law enforcement agency or suggest that it is connected with the federal, state, or local government (a collector making this kind of claim is probably lying, unless it’s trying to collect unpaid child support, or it’s a private check diversion program under contract with a district attorney)
falsely represent the amount you owe or the amount of compensation the collection agency will receive
claim to be an attorney or that a communication is from an attorney
claim that you’ll be imprisoned or your property will be seized, unless the collection agency or original creditor intends to take action that could result in your going to jail or your property being taken (you can go to jail only for extremely limited reasons)
threaten to take action that isn’t intended or can’t be taken—for example, if a letter from a collection agency states that it is a “final notice,” it can't write you again demanding payment
falsely claim you’ve committed a crime
threaten to sell a debt to a third party, and claim that, as a result, you'll lose defenses to payment you had against the creditor, such as a breach of warranty
communicate false credit information, like failing to state that you dispute a debt
send you a document that looks like it’s from a court or attorney or part of a legal process if it isn't
use a false business name, or
claim to be employed by a credit bureau, unless the collection agency and the credit bureau are the same company.
A collection agency can't engage in any unfair or outrageous method to collect a debt. For example, it can’t:
add interest, fees, or charges not authorized in the original agreement or by state law
accept a check postdated by more than five days unless it notifies you between three and ten days in advance of when it will deposit the check
deposit a postdated check prior to the date on the check
solicit a postdated check for the purpose of then threatening you with criminal prosecution
cause you to incur communications charges, such as collect call fees, by concealing the true purpose of the communication
threaten to seize or repossess your property if it has no right to do so or no intention of doing so
communicate with you by postcard, or
put any words or symbols on the outside of an envelope sent to you that indicate it’s trying to collect a debt.
If you think a debt collector has violated the FDCPA when trying to collect a debt from you, consider talking to an attorney to get advice about your options.