When a consumer takes out some type of loan like a credit card, personal loan or other type of financial commitment, they are expected to meet the terms and conditions dictated in the service agreement. If the customer fails to make payments on time and in full every month for the duration of the agreement, the loan becomes late or overdue. If enough time passes, the entire account could be sent to a debt collection agency. These companies are designed to do whatever it takes to recover money on behalf of the original lender. Having an account sent to collections can result in increased fines, severely damaged credit ratings and more.
About the Fair Debt Collection Practices Act
Even though debt collection agencies are authorized to be aggressive when collecting on overdue consumer debt, there are still a few key practices that they are not allowed to use. The Fair Debt Collection Practices Act was established in September of 1977 in an attempt to curb debt collection practices that were considered to be abusive. The act was designed to establish permanent legal protection and give consumers rights with regards to how a delinquent account can be acted upon.
Activities that are prohibited by the Fair Debt Collection Practices Act include:
- Customers can only be contacted by a debt collector between the hours of 8:00 AM local time and 9:00 PM. Contact at any other time of day is strictly prohibited.
- If the customer requests that the debt collector discontinue contact, the collection agency is required to comply even when the account remains delinquent so long as the request is made in writing.
- A debt collection agency can not use a telephone to annoy, harass or abuse the debtor.
- A debt collection can not call the consumer at the place where they work, so long as the consumer makes that formal request.
- Identifying information about the debtor cannot be published on any type of “bad debt” list.
- A debt collection agency cannot threaten the debtor with legal action or arrest.
- The collection agency cannot use language considered to be profane.
- The debt collection agency cannot contact the consumer after it has been established that they have sought the representation of an attorney.
It is the last reason why many people wisely seek professional legal counsel when dealing with debt collection agencies, even though they are under the protection of the Fair Debt Collection Practices Act by default.
The Benefits of Hiring an Attorney
Just because a debt collection agency is prohibited from engaging in certain activities by the Fair Debt Collection Practices Act doesn’t mean that they actually observe those rules on a regular basis. Depending on the agency, certain debt collectors actually count on debtors to be completely unaware of their rights. They use that naivety to continue to engage in illegal contact and threaten, harass and embarrass consumers.
Hiring an attorney will help make sure that you’re able to rest easy knowing your debts are being taken care of. Attorneys are familiar with all rights and consumer laws and as a result are able to identify situations where a debt collector may be acting in an abusive or deceptive way. Attorneys are also often able to speak with debt collection agencies and negotiate reduced debt settlements to help relieve some of the financial burden associated with these types of situations. Additionally, if a debt collection agency is found to be in violation of the Fair Debt Collection Practices Act, the consumer could be awarded some type of financial reimbursement as a result of penalties levied against the agency in question. Hiring an attorney will make sure that, as a consumer, your rights are protected and observed and you get any financial compensation that you are entitled to.