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How Dealing With Debt Collectors Works


The Fair Debt Collection Practices Act
In "Get Shorty," John Travolta plays Chili Palmer, an underworld debt collector whose techniques turn out to be ideal skills for the Hollywood movie business. Chili's tactics -- including threats, intimidation and breaking and entering -- are illegal.
In "Get Shorty," John Travolta plays Chili Palmer, an underworld debt collector whose techniques turn out to be ideal skills for the Hollywood movie business. Chili's tactics -- including threats, intimidation and breaking and entering -- are illegal.
Barry King/Liaison/Getty Images

The Fair Debt Collection Practices Act (FDCPA), as prepared by the Federal Trade Commission, was enacted into law in 1977. Knowledge of the FDCPA is especially useful for determining whether or not you’re dealing with an ethical collector. Below is a quick rundown of the most common concerns covered by the act. For more detailed information, see "How the Fair Debt Collection Practices Act Works," as well as the complete text of the original act.

Collectors may not contact you at an inconvenient time, specified in the act as before 8:00 a.m. or after 9:00 p.m., unless you give the collector permission to do so.

Collectors may not call you repeatedly, nor use threatening, obscene or racist language when calling.

Collectors must be honest. They must identify themselves as debt collectors and not mislead you by implying they’re attorneys or representatives of government agencies. Although they may have a legal right to sue you, they can’t use the threat of a lawsuit to coerce you into making a payment. Keep in mind that a lawsuit is a civil matter, and that the law is not concerned with civil debts. Therefore, a collector must not suggest that you have broken a law or threaten to have you arrested.

The only third party with whom a collector can discuss your debt is your attorney (if you have one). Collectors may call your friends, family and coworkers, but only to obtain your address, phone number or place of employment.

You have the right to stop debt collectors from contacting you, but you must write a letter to the collector requesting that they do so. Once a collection agency receives your letter, they may not contact you again except to inform you that there will be no further contact or to alert you to any impending legal action the agency intends to take. The letters and phone calls may stop, but you’re still obligated to pay your debt, and you could still be sued by the agency or your original creditor.

Be aware that the above applies only to debt-collection agencies; creditors who handle their own in-house collections are not obligated to follow the requirements of the FDCPA. In other words, your local auto dealer has more leeway in employing intimidating tactics if you fall three months behind on your payments. Once the dealer turns your account over to a debt collector, however, that collector must adhere to FDCPA standards.

Now that you know your rights when it comes to debt collection, read the next page for some helpful hints about dealing with debt collectors.