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What Is The Fair Debt Collection Practices Act (FDCPA)?

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FDCPA, Collection Agency, High-Risk Merchant AccountEveryone in the collections industry has heard of the Fair Debt Collection Practices Act, or FDCPA for short. However, many collections agency owners, operators, and agents are unfamiliar with exactly how the FDCPA directly affects their business. The intent of this article is to help provide clarity to a few of the key points. By definition, the Fair Debt Collection Practices Act “limits the behavior and actions of third-party debt collectors who are attempting to collect debts on the behalf of another person or entity.”

The law restricts the methods collections agencies can use when contacting debtors. This includes the amount of times debtors can be contacted and the time of day that contact can be made. It is important to abide by the FDCPA rules and regulations. Both the agency and the individual collection agent may be liable if violations occur. The good news is that violations are easily avoidable when you are aware of the Act.

When Can Debt Collectors Contact Debtors Under FDCPA Regulations?

Debt collection agencies are not allowed to contact debtors at inconvenient times. This means that calls cannot be made before 8 a.m. or after 9 p.m. The only exception to the rule is when the collection agent and debtor have made arrangements for a follow up call that does not fall within these hours. For example, if the debtor agrees to a phone call at 7 a.m. or 10 p.m., the collection agent can call at that time. It is important to notate the arrangement prior to making the call. You will need it on record if the debtor decides to make a false claim about an FDCPA violation.

How Can Debt Collectors Contact Debtors Under FDCPA Regulations?

Collection agents are allowed to reach debtors at their homes or places of employment. However if a debtor informs the agent to stop calling them at work, the collector is not longer allowed to call that number. The debtor can inform the agent in writing or verbally. Collection agents are not allowed to contact the debtor’s associates, neighbors, or family members if they are not in possession of the debtor’s contact information. The agent cannot reveal any information about the debt unless they are speaking directly with the debtor. This includes the fact that he or she is calling from a collections agency. .

What Can Debt Collectors Do Under FDCPA Regulations?

Collection agents are allowed to inform debtors about the debt that is owed. They are also allowed to request payment for the debt that is owed. In many cases, the agent is also allowed to work out a payment plan or even a settlement amount to pay the bill in one lump sum. It must be noted the FDCPA was created to protect debtors from being harassed by collection agencies. While some debtors are under the false impression that they are being harassed when the collection agent is simply performing his or her job under the letter of the law, there are certain criteria to be aware of. For example, collection agents cannot threaten bodily harm or arrest. They cannot threaten to sue debtors unless they actually intend to do so.

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