What is the Fair Debt Collection Practices Act - FDCPA?

What is the Fair Debt Collection Practices Act - FDCPA
BY Rebecca Lake
Feb 16, 2023
Key Takeaways:
  • The Fair Debt Collection Practices Act outlines consumer rights for debt collection.
  • Debt collectors cannot harass, threaten or intimidate you to get you to pay a debt.
  • You can sue a debt collector if you believe they've violated your rights.

Fallen behind on debts? It happens sometimes, and when it does, you might find yourself being bombarded with calls and letters from debt collectors. 

Legally, creditors can attempt to collect what's owed to them. But they do have to follow some rules. That's where the Fair Debt Collection Practices Act (FDCPA) comes in.

The FDCPA protects you against harassment and unfair debt collection practices. If you're being contacted by debt collectors, it's important to know your rights. 

What Is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act is a federal regulation that governs debt collectors. Specifically, the FDCPA outlines what debt collectors can and can't do when attempting to collect certain types of debt. 

In a nutshell, the Act is designed to protect consumers from abusive, unfair, or deceptive practices. It applies to a range of different entities, including:

  • Debt collection agencies

  • Debt buyers

  • Debt collection attorneys

  • Third-party companies that purchase past-due debts in order to collect them

The FDCPA, along with the Fair Credit Reporting Act (FCRA) and the Fair Credit Billing Act (FCBA) is meant to protect your interests as a consumer. 

What is the purpose of the FDCPA?

The main reason the FDCPA exists is to enforce limits on what debt collectors can and can't do. Without laws in place, debt collectors would have free reign to use deceptive or unfair tactics to get consumers to pay debts. 

The FDCPA outlines rules for when and how debt collectors can pursue debts. Here's a rundown of what is and isn't allowed. 

  • When can debt collectors contact you? A debt collector generally can't contact you at a time or place that's unusual or is otherwise known to be inconvenient to you. They also can't contact you before 8:00 AM or after 9:00 PM

  • Can debt collectors contact other people? Debt collectors can't contact you at work if they know that you're not allowed to receive calls there. They can contact your friends and family, but only for purposes of obtaining your contact information. 

  • Is harassment prohibited? Debt collectors can't harass you or anyone else in connection with a debt. That includes harassing calls, texts, and emails. 

  • What if you have an attorney? If a debt collector is aware that you have an attorney for debt collection purposes, they have to stop contacting you and contact the attorney instead. 

Debt collectors can't continue contacting you if you formally request that they stop calling or writing to you about a debt. They also can't offer misleading information to try to trick you into paying. 

For example, a debt collector can't tell you they're going to sue you to get you to pay unless they actually plan to do so. They also can't impose unfair fees or fines in connection with an unpaid debt. 

What debts are covered by the FDCPA?

The FDCPA applies to specific types of debt, including:

  • Mortgage loans

  • Credit cards

  • Medical debts

  • Other personal debts, such as personal loans

If you owe any of those and fall behind on payments, debt collectors have the right to contact you about the balance. 

What debts aren't covered? 

The FDCPA doesn't cover all debts. Specifically, it doesn’t cover:

  • Business debts

  • Collection efforts by the original creditor to whom you were first indebted

If you take out a $100,000 loan to start a small business but the business fails, for example, you wouldn't be able to use the FDCPA as a shield against debt collection. The same is true if your original creditor is trying to collect, versus selling the debt to a third-party debt buyer. 

What is a FDCPA violation?

There are certain things debt collectors can't do under the FDCPA. Debt collectors may be guilty of FDCPA violations for any of the following:

  • Failing to validate debts in a timely manner, if a consumer requests debt validation. 

  • Falsely representing who they are or who they work for. 

  • Implying that they're an attorney or that they work for an attorney when they do not.

  • Communicating false information regarding a debt. 

  • Using threatening language or verbally abusing consumers.

  • Threatening consumers with physical harm.

  • Collecting interest or fees that aren't authorized by law. 

  • Threatening to sue or to repossess property when they have no intention of doing so.

  • Depositing or threatening to deposit a postdated check before the date marked on the check. 

  • Using any type of deceptive means to collect a debt.

  • Contacting consumers about a debt via postcard. 

If you think a debt collector has violated your rights under the FDCPA, you have the right to fight back. Specifically, you're allowed to sue the debt collector for damages.

Under FDCPA rules, debt collectors can be held liable for:

  • Any actual damages you sustain as the result of a violation

  • Punitive damages of up to $1,000

  • Any attorney's fees or court costs you had to pay to file the lawsuit

The only way for a debt collector to escape liability is to show that any violation was not intentional, was a bona fide error or that they acted on an advisory opinion of the Federal Trade Commission (FTC) in good faith Otherwise, the court could order them to pay you for the violation. 

Pro tip: document your communications with debt collectors. 

If you're being contacted by debt collectors, it's important to keep a paper trail of your communications. You could do that by contacting them by letter or email versus chatting over the phone. If you do talk to a debt collector on the phone, make a note of the date, the person's name and the details of the conversation.

And if you're being harassed or think your rights have been violated be sure to document that too. Having supporting documents can help bolster your case if you need to sue a debt collector for an FDCPA violation. 

How to stop debt collectors from bothering you

You could avoid dealing with debt collectors by staying in contact with your creditors. 

For example, say you get laid off from work and you don't have the money to make your credit card payment. You could call the credit card company to ask if it offers a hardship program. Some of the benefits of these programs are:

  • Reduced or waived monthly payments

  • Reduced or waived fees

  • Reduced interest rates

If that's not an option, or if you've already fallen behind, you might look into credit card debt relief instead. Debt relief refers to different solutions for managing credit cards and can include:

  • Debt consolidation

  • Debt management plans

  • Debt negotiation

  • Bankruptcy

Any of these options could put a stop to debt collection calls, but they don't all work the same way. 

Debt consolidation, either through a loan or 0% APR balance transfer, could help you to pay off debts faster while saving money on interest. A debt management plan wouldn't necessarily reduce what you owe but it could streamline monthly payments. 

Negotiating debts with the help of a debt settlement company could allow you to pay off debts for less than what's owed. Bankruptcy is often seen as a last resort option for dealing with unpaid debt. 

Talking to a credit counselor or debt specialist can help you decide what path might be right for you if you're dealing with debt collectors.

Frequently Asked Questions

What is a dispute under the FDCPA?

The FDCPA allows consumers to dispute the validity of debts with a debt collector. To dispute a debt, you must request validation from the debt collector in writing. Once you dispute a debt, the debt collector must halt collection actions until they're able to provide you with written verification that the debt belongs to you.

What is the most common FDCPA violation?

One of the most common FDCPA violations is continuing to try to collect debts that are no longer owed. Other common violations include harassment, making threats, excessive phone calls, and using false information to try to collect a debt. 

What is the difference between FCRA and FDCPA?

What is the difference between FCRA and FDCPA?

The Fair Credit Reporting Act is designed to ensure fairness in credit reporting. Under the FCRA, you have the right to dispute inaccurate or erroneous information in your credit reports. The FDCPA deals with debt collections and what debt collectors are allowed to do when contacting consumers. 

How can I file a complaint against a debt collector?

If you think your rights have been violated under the FDCPA, you can contact the debt collector and ask it to stop, or you can sue it in court. You can also submit a complaint online with the Consumer Financial Protection Bureau, or contact your state’s attorney general.