Vail Law: Here’s a look at the Fair Debt Collection Practices Act
Times are tough. The economy has fallen off a cliff and has only very slowly begun to claw its way back up. In the Vail Valley, real estate and the construction trades are slow. Bills are piling up. The phones are starting to ring. And who’s 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.
That’s where the Fair Debt Collection Practices Act comes in.
This law was first passed by Congress in 1977. It has been amended seven times since, most recently in 2006. The law 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 debt collection agencies when seeking to collect legitimate debts.
The Act is also meant to grant 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 supported by complimentary state laws which 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? Lots of them. The act is specifically targeted to apply to any person or entity who regularly collects debts owed to third parties, including lawyers who regularly perform debt collection services. In-house collection departments are not generally included under the act. If, for example, you owe a local merchant a debt, the law will not regulate the merchant or prevent him from contacting you about the debt. If, however, the merchant employs an outside debt collection service, the law will likely will apply.
Here are some of the restrictions:
• Debt collectors may not contact neighbors, friends, relatives or employers of the debtor except when that party is a co-signer for the debt.
• They may not falsely threaten to refer your account to an attorney, harm your credit rating, repossess property or garnish wages;
• They may not repeatedly call at unreasonable times (before 8 a.m. or after 9 p.m.), unless you have given the debt collector permission to contact you during those hours.
• They may not 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).
• Debt collectors may not inform your employer of the purpose of the call, unless first asked by the employer.
• They also may not 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, or threaten you with arrest if you do not pay the debt.
Next week’s column 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 law.
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 and commercial transactions, real estate and development, homeowner’s associations, family law and divorce and civil litigation. He may be heard on Wednesday nights at 7 p.m. on KZYR radio (97.7 FM) as host of “Community Focus.” Robbins may be reached at 970-926-4461 or at his e-mail address: email@example.com.