Understanding the Fair Debt Collection Practices Act
While opting for a loan you may be considering 2 important aspects. First, how you will be repaying the loan -whether you will be able to fulfill the contractual obligation to repay the amount in fixed monthly payments. Second, the nature of the debt collector- debt collectors often tend to catch debtors off-guard to collect pending debts. While not all debt collectors follow underhand tactics, this is still a serious concern for many.
Therefore, to ensure a fair debt collection practice, a federal law known as the FDCPA or The Fair Debt Collection Practices Act has been enacted which governs the actions of debt collectors. Collectors of personal debts have to strictly adhere to this federal law. Personal debts may include auto loans, medical bills, home loans, and credit card accounts.
Features of Fair Debt Collection Practices Act
While debt help services are available for people who need help with managing and repaying debts, the purpose of this federal law is to protect debtors legally. When the creditors use a third party to collect the debt, they have to follow some ground rules set by FDCPA, including the following:
• The debt collector cannot call a third party who does not owe any debt, such as your relatives, friends, neighbors and employers. Co-signers are an exception here.
• The debt collector cannot pose false claims like harming your credit rating and referring the account to an attorney just to intimidate you.
• The debt collector cannot call you at unreasonable times. A call cannot be made before 8:00 AM or after 9:00 PM unless you have given special permission for the debt collector to call you during these hours.
• The debt collector cannot make use of obscene or profane language.
• The debt collector cannot conceal his identity over the phone.
• The debt collector cannot disregard a written request from you to cease further contact.
• The debt collector cannot call you while you are at work, unless approved by your employer.
Apart from these basic restrictions imposed by FDCPA, there are some guidelines that dictate the mode of communication for a debt collector. A debt collector cannot communicate with you via post card or use any symbol or alphabet to indicate their identity. If you are represented by an attorney, the debt collector can only contact your attorney.
Violation of Rules
If your rights have been violated, you can file a lawsuit against the debt collector. You have one year from the date of violation to file the lawsuit. You could receive up to $1000 in addition to the attorney’s fees and court costs. These restrictions/guidelines make sure that there is no violation in the contract. It is imperative that parties to a contract get a hold on the rules to avoid any ambiguities.
It is important to understand your rights as a debtor and if your debt collector is violating FDCPA, feel free to implement methods to protect your right.
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