Debt Collection Legalities: What Can Or Can’t Be Done?


Debt issues can be hard to manage, as you find yourself falling behind on monthly bills. Getting a call from persistent debt collector makes it more stressful. A debt collector could be the service provider collecting the debt or a debt collection company acting on the creditor’s behalf. If you don’t contact your provider or you refuse to respond to them, a debt collector may contact you. If the debt remains unpaid, the creditor can proceed with legal action against you. Take action quickly to avoid the situation getting worse. You could end up with a bigger debt, you can lose your home or possessions or you could end up paying money you don’t really have to pay.

A debt collection company make a business of getting debts paid. They may pursue you persistently to demand payment. If you are dealing with a debt collection company, it is important for you to know your rights.  Learn what can or can’t be done by debt collectors to help you deal with them and get protected for their approaches to debt collection.

The Fair Debt Collection Practices Act (FDCPA) protects consumers from illegal debt collection activities of debt collectors except creditor’s in-house debt collectors. This federal law governs debt collection for personal, family and household debts like personal loans, credit card loan, car loan, past-due utility bills, student loans, medical and insurance debts, bounced checks, and unpaid legal judgments against you. You can use your knowledge of these laws to protect yourself from harassment. If the debt collector violates the law, you can use the violation to negotiate better settlement or file a complaint with the Consumer Financial Protection Bureau or sue the collector.

What can debt collectors do?

Debt collectors  can contact you in different ways, by phone, email, social media, letter or personal visit. There is no need for personal visit if there is a repayment arrangement made over the phone, letter or email. Debt collectors can use email, social media or digital technology to contact you, but it must not be shared with another person or viewed by anyone except you. Debt collectors can only communicate  with you to:

  • Provide information about your account
  • Make demand for payment
  • Offer account settlement or alternative payment arrangements
  • Review existing arrangements
  • Explain legal consequences of not paying
  • Explain restrictions or disconnection of your utilities
  • Find out why you are not responding to contact attempts
  • Find out your reason for not keeping the agreed repayment plan

Debt collectors are only allowed to contact your lawyer, your credit reporting agency and the original creditor. Collectors can also contact your spouse, parents if you’re a minor and your co-debtors to find information about your whereabouts.

Illegal Debt Collection Practices
Debt collection companies cannot do any of the following to collect a debt from you:

  • Call you at inconvenient time, before 8:00am or after 9:00pm unless you tell them to do so.
  • Call you on a Sunday
  • Contact you at work if your employer does not allow you to be contacted during working hours.
  • Get in touch with your employer about your debt, unless it’s a past-due child support
  • Contact your relatives, friends or neighbours about your debt in order to embarrass you into paying
  • Use postcard or envelope that clearly indicates the debt collector’s purpose
  • Use letter or envelope like the government agency or the court.
  • Order you to accept calls from them

Debt collection companies cannot engage in conduct that can harass, oppress or abuse you. They cannot:

  • Call you repeatedly during relatively short period of time, this can be considered harassment
  • Call you without identifying the bill collector
  • Use obscene or abusive language
  • Use or threaten to use violence
  • Threaten to harm you, your reputation or your property
  • Publish your name as a person who doesn’t pay debt

False or Misleading Representations

  • Claim to be a law enforcement agency that is connected with federal, state or local government
  • Claim to be a lawyer or the communication is from a lawyer
  • Claim that you’ll be put in prison or your property will be taken
  • Communicate false credit information
  • Threaten to take action that is not intended to be taken
  • Falsely claim you’ve committed a crime
  • Threaten to sell your debt to a third party
  • Send you a document that looks like a court order
  • Use a false business name or claim to be employed by a credit bureau

Unfair Practices

  • A debt collection company cannot engage in any unfair method to collect a debt from you. They can’t:
  • Add interest, fees or charges that is not included in the original agreement
  • Collect more what you owe
  • Deposit postdated check prior to the date on the check
  • Accept postdated check by more than five days unless they notify you in advance
  • Solicit postdated check to threaten you with prosecution
  • Threaten to repossess your property

It is important to know your rights so you won’t be intimidated by debt collectors. Stand up for your debt collection rights and don’t allow them to harass you with unfair and illegal tactics. If you receive notice that you are being taken to court, get legal advice as soon as possible. Don’t ignore the notice but take action immediately. Get advice from financial counselor to know the best option available for you is. If the debt collection company break any of these rules, feel free to report them to your state attorney general’s office, the Consumer Financial Protection Bureau or the Federal Trade Commission.


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