With millions of Americans in debt, debt collection has become a booming industry. In 2004 alone, the debt collection industry made over $16.5 billion in profit. With so much money on the line, debt collection agencies are under a lot of pressure. In some cases, this pressure has resulted in abusive and aggressive behavior that many debtors find intimidating.
So, in order to protect debtors, the United States had to formulate debt collection laws that will help keep debt collectors in check. The primary debt collection law is the Fair Debt Collection Practices Act (FDCPA) of 1977. In a nutshell, the FDCPA specifies ways in which debt collectors must conduct themselves.
As the most prominent of all the debt collection laws, the FDCPA has measures that prohibit debt collectors from engaging in certain activities. Some of these include the following:
Violations of your privacy – Debt collectors can only talk to other people for the purpose of finding your current location. They are not allowed to disclose any information regarding the terms of the debt collection process. In the first place, they are not allowed to tell anyone that you have an outstanding debt.
Unfair calls or visits – According to debt collection laws, especially the FDCPA, debt collectors are not allowed to appear at your doorstep whenever they want to. They are only allowed to call or visit between the hours of 8:00 am and 9:00 pm. Debt collectors are also prohibited from appearing at your workplace, especially if you have previously informed them that you are against such visits.
False Representation – The debt collector cannot intimidate you with false authority. He cannot say that he is a lawyer if he isn’t. He cannot inform you that he has the power to personally repossess your things. He also cannot present documents that make it seem like his actions are directed by the government.
However, the FDCPA is not the only law that is related to debt collection. Individual states usually have their own debt collection laws that are imposed to provide protection for their own citizens. In California, for example, the debt collection laws require the debtor to keep written records of communications and transactions with the debt collector.
On the other hand, Pennsylvania has a Fair Credit Extension Uniformity Act that helps protect debtors from the deceptive behaviors of debt collectors. This act supports the FDCPA and it states that debt collectors CANNOT falsely imply that your inability to pay your debt is a crime. The debt collection laws of Pennsylvania also detail that debt collectors are not allowed to issue false threats of legal action.
Other states also have their own debt collection laws. These debt collection laws have one thing in common – they help protect debtors from being abused by eager debt collectors. The debt collection laws make sure that the growth of the debt collection agency is coupled with the values of good service and integrity.