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

FDCPA, Debt Collection, Collection Regulations, Collection Agency


      Everyone 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. This article intends to help provide clarity to a few of the critical 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 behalf of another person or entity.”

      The law restricts the methods collections agencies can use when contacting debtors. This includes the number of times debtors can be contacted and the time of day that contact can be made. It is essential 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 breaches 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 before 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 no longer allowed to call that number. The debtor can notify the agent in writing or verbally. Collection agents cannot contact the debtor’s associates, neighbors, or family members if they do not have 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 entitled to request payment for the debt that is owed. In many cases, the agent can also 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 merely performing their job under the law’s letter, there are specific criteria to be aware of. For example, collection agents cannot threaten bodily harm or arrest. They cannot threaten to sue debtors unless they intend to do so.

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      Eli Smith

      Eli Smith

      Responsible for keeping Payment Savvy running like a well-oiled machine, Eli has extensive experience with everything related to technology and financial services. Maintaining back-end operations efficient and productive isn't his only strong suit, Eli is also a key component of our sales team and is in constant pursuit of perfection. In charge of ground-breaking partnerships, he is always on the lookout for the next innovative product offering for our Savvy clientele. Eli's knowledge of the payment processing cycle and critical compliance standards ensure our customer base always has an educated and expert opinion if needed.