Tuesday, December 8, 2009

FDCPA imposes restrictions on collection practices

Are collection agencies calling you for payments at odd hours? Are they harassing you and threatening you for payments? It is true that a collection agency has every right to ask for payments that you owe. However, as per FDCPA (Fair Debt Collection Practices Act), you, as a debtor, also have legal rights about how and when they can contact you. However, the FDCPA rules apply to the debt collectors and collection agencies but not to the creditors.

Restrictions imposed on collection agencies

As per FDCPA, the collection agencies cannot do the following.

1. Threaten you: A collection agency cannot threaten you to harm your credit rating or refer your account to an attorney. However, a debt collector can warn you to refer your case to an attorney or report it to a credit agency.

2. Contact a third party: As per Fair Debt Collection Practices Act, a collection agency cannot contact any third party, who doesn’t owe the debt. As for example, collectors cannot contact your employer and family members to collect the dues.

3. Inform employers about the purpose of call: While calling you at work, a collection agency should not inform your employer about the purpose of the call unless the employer asks for it.

4. Call you at odd times: FDCPA prohibits debt collectors to call you at odd hours. They are not supposed to contact you before 8 am and after 9 pm. However, they can call you at these hours if you’ve given them permission to do so.

5. Request for post dated cheques: A collection agency cannot request for post dated cheques with wrong intentions. Many a times, debt collectors ask for post dated cheques in order to take legal action against you if the cheques bounce.

6. Use fake identity to collect debt: Sometimes, debt collectors pretend to conduct a survey with the sole intention to collect information about the debtor. It is against FDCPA laws.

7. Use abusive words: Fair Debt Collection Practices Act restricts a collection agency to use abusive language while asking for payments.

You have every right to sue a debt collector who violates FDCPA norms. However, you must do it within 1year from the date of FDCPA violation. If you win, you may also make claims in order to recover the damages that you have suffered due to the violation of FDCPA.

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