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Fair Debt Collection - Things Debt Collectors Can and Can't Do
by: Montana Legal Services Association (MLSA)
Federal law protects you from certain unfair and harassing actions by debt collectors. The law is called the Fair Debt Collection Practices Act (FDCPA). Under the law, a debt collector may not harass, abuse, mislead, lie, or be unfair to you. The law covers personal, family and household debts. It does not cover business or commercial debts. Who is a debt collector? A debt collector is anyone who collects debts for others. In other words, if you owe money to a business, that business is not considered a debt collector. However, debt collection agencies are considered debt collectors. Only debt collectors are covered under the FDCPA. The law does not apply to creditors who collect their own debts. How may a debt collector contact me? A debt collector may contact you in person, by mail, telephone, telegram, or fax. However, if you write a letter to the debt collector asking them to stop contacting you, they must stop. This letter is called a "cease contact letter." Once a debt collector gets your letter, they can't contact you again, except to say there will be no further contact or that they intend to take a certain legal action against you. If they do contact you, they are breaking the law, and you should talk to a lawyer. A sample cease contact letter is available on MontanaLawHelp.org. As with any other letters you send, make a copy of the letter and save it in a safe place. Send the letter by certified mail, return receipt requested. Save the certified mail receipt and the green return receipt with your copy of the letter.
Keep in mind that this letter does not make the debt go away. It only forces the debt collector to stop contacting you. The debt collector can still take you to court to try to collect your debt.
What is a debt collector NOT allowed to do? A debt collector may not contact you an excessive number of times or at unreasonable times or places, such as before 8:00 a.m. or after 9:00 p.m. A debt collector may not contact you at work if the debt collector knows that your employer doesn't allow such calls. If you are contacted at work, tell the debt collector in writing that your employer does not allow such calls. A sample letter telling a debt collector to stop contacting you at work is available on MontanaLawHelp.org.
If the debt collector calls you at work after he knows that collection calls are not allowed, talk to a lawyer. Keep a piece of paper by your phone and write down the date and time of each phone call. If you talk to the debt collector, write down what the debt collector said to you. Be sure to write down each time the collector calls. Also keep a list of witnesses who heard the debt collector's calls. It is against the law to call you at work after you tell a debt collector not to. Your written record and witnesses may help you if you have to go to court later.
May a debt collector contact anybody else about my debt?
If you have a lawyer, the debt collector may not contact anyone other than your lawyer, including you. If you don't have a lawyer, a debt collector may contact other people, but only to find out where you live and work. The debt collector can not contact other people if he already has your contact information. A debt collector can not contact other people to get location information more than once. A debt collector can not tell or suggest to anyone other than you and your attorney that you owe money.
What harassing and abusive acts by debt collectors are against the law?
Debt collectors may not harass or abuse anyone. For example, debt collectors may not do the following:
- threaten to harm anyone or damage anyone's property;
- threaten to harm or damage anyone's reputation;
- publish a list of debtors (except to a credit bureau);
- use obscene or profane language;
- repeatedly use the phone to annoy anyone;
- call you without identifying themselves; or
- advertise your debt for sale.
What misleading and deceptive acts by debt collectors are unlawful? Debt collectors may not lie to you or mislead you. For example, debt collectors may not do the following:
- say you have committed a crime (it is NOT a crime to have debt);
- say you will be arrested or jailed if you don't pay your debt;
- say they will take your income, money, or property unless it is legal to do so and they actually intend to do so;
- say that a lawsuit will be filed against you, when they don't intend to. For example, its against the law for a debt collector to send you a letter saying that he will sue you in 10 days if you don't pay the debt, and then not sue you within 10 days;
- say or suggest that papers being sent to you are court papers, when they are not;
- say or suggest that papers being sent to you are not court papers, when they are;
- send you papers made to look like they are from a court or from the government, when they are not;
- falsely say or suggest they are attorneys or that an attorney is helping collect the debt;
- falsely state the amount of your debt; or
- use a false name.
What unfair acts by debt collectors are unlawful? Debt collectors may not be unfair. For example, debt collectors may not do the following:
- call you collect, or send telegrams you must pay for;
- contact you by postcard;
- put anything on an envelope that shows it comes from a debt collector;
- collect any amount greater than your debt, unless it is legal to do so; or
- deposit a post-dated check before the date on the check.
What control do I have over payment of my debts? If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you don't believe you owe. What if a debt collector breaks the law? You may sue the debt collector in state or federal court within one year from the date the debt collector broke the law. If you win, you may be able to get up to $1000 plus money for any damages you suffered. You also may get money to pay your court costs and any lawyer's fees. Because the law allows you to get lawyer's fees if you win, sometimes you can find a lawyer to take your case even if you don't have money to pay him up front. You should talk to a lawyer if a debt collector has broken the law. What if I can't find a lawyer and don't want to sue the debt collector by myself? Lawsuits can be complicated and costly. Even if you don't plan to sue the debt collector, it is still very important that you keep detailed records of any contacts by the debt collector and any illegal actions they take. If the debt collector ends up taking you to court over the debt, you may be able to counter-sue with evidence of the debt collector's illegal actions. However, you may only counter-sue for a violation within one year of the date the violation occurred. What records should I keep of my contacts with a debt collector? The most important thing you can do when dealing with a debt collector is to keep records and copies of all contact that takes place between you and the debt collector. Find a safe place to keep all of your records.
- Keep a piece of paper by your home, work, and mobile phones. Write down the date and time every time the debt collector calls you. If you talk to the debt collector, write down the name of the collection agency, the name of the person you talked to, and what he or she said to you. Be sure to write down EACH time the collector calls.
- Keep every letter and every envelope that a debt collector sends you. The information in the letter and on the envelope may be important if you have to go to court.
- Keep a copy of any letter you send to a debt collector and save it in a safe place. Send all letters by certified mail, return receipt requested. Save the certified mail receipt and the green return receipt with your copy of the letter.
What if the creditor contacts me instead of a debt collector? If the original creditor contacts you instead of a debt collector, then the Fair Debt Collection Practices Act does not apply. However, many of the rules and information that you have read still apply. A creditor who is collecting his own debts also may not harass, abuse, mislead, deceive, or be unfair to you. If you don't want to talk with a creditor on the phone, you can hang up the phone the same way you would with a debt collector.
Where can I report a debt collector for violating my rights? You can report any violation of your rights by a debt collector to the Montana Consumer Protection Office at 406-444-4500. You should also report such violations to the Federal Trade Commission at 1-877-FTC-HELP (1-877-382-4357), or use their online complaint form at https://rn.ftc.gov/pls/dod/wsolcq$.startup?Z_ORG_CODE=PU01
If you are having trouble with debt collectors, you should also read "Debt Collectors Won't Leave Me Alone- What Can I Do?"
Revised 10/05
Call the MLSA HelpLine for legal assistance:
(800) 666-6899
Montana Legal Services Association
616 Helena Avenue, Suite 100
Helena, Montana 59601
(406) 442-9830
(800) 666-6124
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