Debt Collections Laws

The federal government has set up debt collections law to protect the borrowers from unfair debt collection practices. The most popular program under this is the ‘Fair Debt Collection Protection Act’ - FDCPA. There were times when creditors and collectors pursued any measure to make the borrowers pay the balance and more. They went to the extremes of extortion, lies and threat to collect the money. To change all this, the Congress introduced the FDCPA as a debt collections law.

Fair Debt Collection Protection Act governs how the collection agencies and debt collectors can interact with customers, especially, the measures they need to follow for collecting debt. It has brought about a great change for the consumers. This debt collections law gives them the right to take the collection agency to court if it can be proved that the collectors had followed unlawful measures to collect debt.

Facts about FDCPA

A consumer must be well equipped with all the facts and rights under this federal act. Under this debt collections law, the following aspects ensure that the consumer is well protected.

  • Debt collection personnel must identify him or herself as a debt collector. He or she must not falsely identify him or herself as an attorney, law enforcement, court official or someone else.
  • Collection agency must have proof of the debt that they claim to be that of the consumer. They should furnish the details such as the original creditor’s name, original debt amount, and their collection fee.
  • The agency must not call the consumer’s home excessively. They must not call at the consumer’s office, if the consumer had told them that he or she is not allowed to receive such calls there. If the collector’s calls persist, the consumer can approach FDCPA attorney to take action against the agency.
  • The debt collector must approach the consumer respectfully. Even if the consumer owes money, the collector is not allowed to demean, insult, belittle or threaten the consumer.
  • If the consumer does not want the agency to call at all, then the consumer can send ‘Cease and Desist Letter’ to the agency. The agency must stop calling at the house, but can pursue other legal means to collect the money.

In addition to the FDCPA, the consumers must be aware of the Fair Credit Reporting Act. As per this debt & collections law, the credit reporting agencies have set rules of how and what they can list in the consumer’s credit report. This can be useful for consumers in repairing their credit.

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