Vail Law: A look at the Fair Debt Collection Practices Act
(Part one of two)Times are tough. The economy has fallen off a cliff and has only very slowly begun to claw its way back up. Locally, real estate and the construction trades are slow. Bills are piling up. The phones are starting to ring. And on the other end of the line is not your Great Aunt Martha, from whom you haven’t heard in a billion years, but a bill collector with what seems to be no sense of humor.What are you going to do?That’s where the Fair Debt Collection Practices Act comes in.What is it?The Fair Debt Collection Practices Act is a federal law, first passed by Congress in 1977. Since its adoption, it has been amended seven times, most recently in 2006. The act was adopted in response to abusive collection practices which, in turn, led to an increase in personal bankruptcy filings. The stated purpose of the act is to provide guidelines and accepted practices for collection agencies when seeking to collect legitimate debts. At the same time, the act is meant to afford certain protections to consumers, to shield them from unscrupulous debt collection practices, and to provide consumers with certain remedies against rogue debt collectors. It is important to note that the federal act is generally overlaid by complimentary state laws which, not surprisingly, vary from one state to the next.The act extends to personal, family and household debts. Included under its protections are debts associated with the purchase of a vehicle, mortgage debt, debts associated with medical services, and money owed on credit card accounts.What debt collectors are subject to the act?Well, lots of them. The act is specifically targeted to apply to any person or entity that regularly collects debts owed to third parties. The definition includes lawyers who regularly perform debt collection services. In-house collection departments are not generally included. If, for example, you owe a local merchant a debt, the law will not regulate the merchant or prevent him from contacting you about it. If, however, the merchant employs an outside debt collection service, the law more than likely will apply.The debt collector may not:• Contact persons who do not owe the debt in an effort to prevail upon the debtor to satisfy his debt. For example, the collector may not contact neighbors, friends, relatives or employers of the debtor except when that party is a co-signor for the debt.• Falsely threaten to refer your account to an attorney, harm your credit rating, repossess property or garnish wages.• Repeatedly telephone or call at unreasonable times, defined under the act as before 8 a.m. or after 9 p.m., unless you have given the debt collector permission to contact you during those hours.• Call you at an inconvenient place (most commonly, contacting you at work in violation of a known policy of your employer or after being requested not call at work).• Inform your employer of the purpose of the call, unless first asked by the employer.• Use foul, abusive, or obscene language or employ racial slurs or insults.• Send letters which appear to have come from a court.• Seek collection fees or interest charges not permitted by your contract or by law.• Request post-dated checks with the intention of prosecuting if they bounce.• Sue in courts distant from where you live.• Make false representations in association with efforts to collect the debt.• Make false claims to collect information about the debtor (such as posing as someone conducting a survey). • Threaten you with arrest if you do not pay the debt.In the next part, we will examine what to do when a debt collector violates the act, how to assert your rights, and what remedies may be available to consumers under the protections of the act.Rohn K. Robbins is an attorney licensed before the Bars of Colorado and California who practices in the Vail Valley. His practice areas include: business & commercial transactions, real estate & development, homeowner’s associations, family law & divorce and civil litigation. He may be heard on Wednesday nights at 7 p.m. on KZYR radio (97.7 FM) and seen on ECO TV18 as host of “Community Focus.” Robbins may be reached at 970-926-4461 or at email@example.com.