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Consumer Assistance Topics

Debt Collection

Last Updated: May 26, 2021

Most consumers never expect to fall behind on their debts and obligations. Sometimes, however, circumstances beyond a person’s control will result in them being contacted by a debt collector.

The information provided here will help you know what to expect, what to do, and what your rights are should you find yourself dealing with a debt collector.

Debt Collection Basics

Debt collectors are individuals and agencies that collect debts owed to others, such as a bank, attorney, landlord, or other business or individual.  The Fair Debt Collection Practices Act (FDCPA) is a federal law that governs how debt collectors (including a bank that collects its own debt under another business name) operate and prohibits debt collectors from using unfair or deceptive practices to collect debts. Your state laws may offer additional protections.

The FDCPA only covers debt for personal, family, or household purposes, and does not protect debt for small businesses.

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Consumer Protections on Debt Collection

Under the FDCPA, debt collectors are prohibited from:

  • Contacting consumers at unusual times, which typically means before 8:00 a.m. or after 9:00 p.m. in the consumer’s time zone;
  • Using obscene or profane language; threatening or using violence, or falsely stating or implying that the debt collector is affiliated with the United States government or a state government;
  • Contacting consumers at their place of work if the consumer has notified the debt collector that they are not allowed to receive calls at work;
  • Telling a consumer’s co-workers or friends that the consumer is in debt; and
  • Abusing or harassing a consumer by, for example, repeatedly calling their telephone or letting it ring continually.

Under the FDCPA, certain debt collection practices are permitted. For example, a debt collector can contact your friends, neighbors, and co-workers, but only to find out your home address, phone number, and work address.

Also, debt collectors can contact your attorney, the creditor, the creditor’s attorney, the debt collector’s attorney, and credit reporting agencies (in some cases). Debt collectors may also contact your spouse, parent (if the accountholder is a minor), guardian, executor, or administrator.

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Tips for Dealing with a Debt Collector

The following steps can be useful if you find yourself being contacted by a debt collector:

  • Verify the debt is legitimate. When a debt collector first contacts you, they will probably tell you the amount owed and the creditor’s name. In some cases, a debt collector will send a letter to the consumer with this information. Make sure this information is accurate.
  • Request an end to communication. When a creditor receives your written request to stop contacting you, they must stop contacting you (an exception is made for informing you there will be no further contact or to let you know that a specific action, like filing a lawsuit, is planned). However, it is important to note that this does not mean the debt goes away – the debt collector can still take legal action to collect the debt.
    • Consider limiting communication by hiring an attorney. Once debt collectors know you have an attorney to handle the debt, they will contact the attorney instead of you.
  • Consider your legal options. If you think your rights under the FDCPA have been violated, you may want to contact an attorney to discuss your legal options.
  • File a complaint with the FDIC. The FDIC directly handles debt collection complaints related to FDIC-supervised banks and forwards complaints to other regulators as needed.

Many individual states have enacted their own versions of the FDCPA, which may provide additional protections.  You can find your state’s regulator at the Conference of State Bank Supervisors State Banking Directory (csbs.org)

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Additional Resources

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