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The Fair Debt Collection Practices Act (FDCPA) is a federal law that governs practices by third-party debt collectors — those who buy a delinquent debt from an original creditor, like a credit card company.
The FDCPA applies to debts incurred by a person, family, or household. The act does not apply to debts incurred by businesses, or primarily for business purposes.
The FDCPA governs people and companies that collect debts on behalf of someone else. This means that employees of debt collection agencies and debt buyers must comply with the FDCPA. And this includes law firms that engage in third party debt collection as well.
However, the company to which you originally owe money (the creditor) does not have to comply with the FDCPA if they are trying to collect their own debts.
Consumers can limit when and how debt collectors contact them. Collectors are not allowed to call at any inconvenient time or place and can’t tell third parties about consumers debt.
Under the FDCPA, debt collectors:
The Fair Debt Collection Practices Act prohibits debt collectors from engagement in specific forms of harassment or abusive practices in an attempt to collect the debt.
This means debt collectors cannot:
The Fair Debt Collection Practices Act prohibits debt collectors from using false, deceptive or misleading statements to collect on debts.
This means debt collectors cannot misrepresent:
Other tactics prevented by the FDCPA:
Under the FDCPA, debt collectors must prove that a consumer owes the debt they’re attempting to collect with a validation letter (and verification letter if the consumer requests it).
Collectors must send this validation letter within five days of their first contact with the consumer. It should contain:
Updates to the FDCPA went into effect in late 2021, which clarified the ability of debt collectors to use social media to contact you, with certain limitations.
Debt collectors are now able to contact consumers by email, text message and social media messages without prior consent from the consumer to use these channels. The messages must include a disclaimer that tells the consumer how to opt-out or limit future communications.
A debt collector cannot communicate with a consumer through social media if other consumers can see the message, such as a public comment on an Instagram post.
Collectors must disclose to a consumer that they are a debt collector before sending a friend request.
And existing FDCPA restrictions against communication with a consumer at inconvenient times or places now apply to electronic channels like social media.
The CFPB clarified that collectors cannot sue or threaten to sue consumers over debts if those debts are past the statute of limitations for bringing a lawsuit.
However, debt collectors can still ask consumers for payment on the expired debt — this alone isn’t a violation. It’s threatening to sue the consumer that creates a problem.
Another recent update around the FDCPA protects consumers from having a collector report debts to a credit agency without giving the consumer appropriate notice and warning.
Before a debt collector can report a debt to a credit reporting agency they must disclose details about the debt and the consumer’s rights to the consumer themselves. (Again, this applies to third party debt collectors. A creditor who you originally owe the debt to can still report it.)
