Understanding the Fair Debt Collection Practices Act

By Michelle Dunn

www.MichelleDunn.com

According to the FTC

• In 2009 there were 32,076 complaints about in-house collectors

• In 2008 there were 26,652 complaints about in-house collectors

• A difference of 5,424 complaints

According to the Better Business Bureau:

Debt Collectors resolve 85% of the complaints received against

them, which is significantly higher than any other industry.

Debts covered by the FDCPA:

• Personal debts• Family debts• Household debts• Personal credit cards• Auto loans• Medical bills• Mortgage

How bill collectors can contact debtors:

• In person• By mail• By telephone• By telegram• By fax

The FDCPA only applies to:

• Consumer debts– Mortgage– Auto loan– Medical bills– Credit card bills– utilities

• Third party debt collectors – NOT original creditors

Last year 4,162 consumers complained about collectors

calling them at work.

The law instructs collectors not to call consumers at work if the consumer has

stated their employer prohibits such contacts and such contacts may put the

employee’s job at risk.

The FDCPA requires collectors to:• Identify themselves as a debt collector• Give the name & address of the original

creditor• Notify the consumer of their right to

dispute the debt• Provide verification of the debt• File a lawsuit in a proper venue• Check time zones before calling debtors• Have written polices in place• Have a compliance plan and a compliance

officer to oversee that plan

Complaints received by the FTC:

• 88,190 FDCPA complaints about 3rd party collectors in 2009

• 78,925 FDCPA complaints about 3rd party collectors in 2008

Resources• www.ftc.gov

• www.credit-and-collections.com

• www.encyclopediaofcredit.com

• www.FDCPA.biz