How the Fair Debt Collection Practices Act Works

How the Fair Debt Collection Practices Act Protects You

Here's a good thing to know: A collection agency must stop calling you if you send them a letter requesting that they stop. After that, they're permitted one additional call or letter to inform you that they will cease contact, or that they are about to initiate legal action. But an end to the calls doesn't mean an end to your debt.

Usually, at first contact, the collector provides the specifics of your debt, including the amount you owe and the creditor to whom you owe it. If not, he or she must send you a written notice within five days. If you dispute any portion of the debt, or disagree with any of the information provided, you have up to 30 days to request a debt validation. If you don't do so within 30 days, the collector will consider your debt valid.

It's often wise to request a validation even if you find no reason to disagree. A validation gives legal proof that the amount of your debt is correct and that the collection agency has been authorized to collect it. Collectors must reply to requests for validation within 30 days.

Your debt may be valid, and the debt collector may be authorized to collect it, but this doesn't mean that the collector's information is 100 percent accurate. A collector's records may state that you owe more debt than you actually do. The collector may lack records of payment. Occasionally, a collector might confuse you with somebody else.

If you dispute your debt, send a letter outlining your dispute to the collection agency within 30 days. (You can see some examples at the Web site). Once the agency receives your letter, all collection efforts must stop until an investigation is conducted.

It might be necessary to sue the collection agency if disputes with your collector can't be resolved, or if you believe the collector has violated the law. You may first want to register a complaint with the FTC, your state Attorney General or Consumer Protection Office, or the American Collectors Association. These agencies have limited resources and usually don't engage in lawsuits except in the most extreme cases of FDCPA violation. Nevertheless, it's a good idea to have officially registered a complaint before proceeding with a lawsuit.

The FDCPA provides guidelines for legal action against collection agencies. If successful, you may receive the amount of damages plus up to $1,000; the collector may also be liable for attorney fees and court costs. The National Association of Consumer Advocates can help you locate an attorney who specializes in such cases.

The best way to avoid dealing with collection agencies is to pay your bills on time. But that's not always possible. We may be beyond the era of poorhouses and debtors' prisons, but financial hardship is not unique to any era. The Fair Debt Collection Practices Act provides you at least some protection.

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