If you’re an attorney or debt collector, collecting consumer debts on behalf of other individuals or businesses, you need to know about the FDCPA. The Fair Debt Collection Practices Act is a Federal law that governs what third-party debt collectors can do in collecting a debt.
Attorneys may not consider themselves debt collectors, after all, a client simply hires you to file a lawsuit on their behalf. However, in April 1995, in Heintz v. Jenkins, the U.S. Supreme Court held unanimously that the FDCPA does indeed apply to attorneys and law firms collecting debts for clients.
A third-party debt collector is anyone who collects debt on behalf of another. It doesn’t apply to a company collecting its own debts, unless the company is collecting debts under another name.
Two Things the FDCPA Requires Collectors to Do
Debt collectors have to identify themselves when they’re collecting a debt and let the consumer know that any information obtained will be used to collect the debt. This spiel has become known as the “mini-Miranda” because it’s similar to the Miranda warning given by police to criminal suspects.
Debt collectors are also required to send a debt validation notice to the consumer either with the initial communication or within five days of the initial communication. This notice lets the consumer know that they have the right to dispute the debt within 30 days of the notice. If the consumer disputes the debt within the timeframe, collection efforts have to stop until the collector sends proof of the debt.
All the Many Things Collectors Cannot Do
Much of the FDCPA outlines all the many, many things attorneys and collectors cannot do when collecting a debt from a consumer. Debt collectors and attorneys cannot:
Communicate with someone other than the consumer about the debt. Exceptions include the consumer’s spouse, a parent if the consumer is under age 18, executor of the consumer’s estate, or the consumer’s attorney.
Communicate directly with the consumer once the collector knows an attorney represents the consumer.
Communicate with the consumer after receiving a written notice to cease communication, except to let the consumer know what action, if any will be taken next.
Communicate with the consumer via postcard or use any markings on the envelope that indicate the mailing is from a debt collector.
Call the consumer’s place of employment if the collector knows or should know the consumer’s employer does not allow such calls.
Call a consumer before 8 a.m. or after 9 p.m. or any other time the collector knows or should know to be inconvenient.
Harass consumers or use obscene language.
Publish a list of consumers who owe debts, except to credit reporting agencies.
Threaten to sue when there is no intent to sue.
Deceive the consumer.
Collect more than is legally allowed, for example, tacking attorney’s fees onto the debt may not be legal.
Deposit a postdated check before the date on the check.
Attorneys must be careful not to send letters or debt collection notices to consumers in states where the attorney is not admitted to practice. This could constitute a violation of the FDCPA.
Results of FDCPA Violations
Consumers are allowed to sue debt collectors who violate the FDCPA for up to $1,000 in damages. Consumers may also complain to the Federal Trade Commission, Consumer Financial Protection Bureau, or state Attorney General. Any of these government agencies may take legal action against collectors who violate the law including financial penalties, an order to refund all affected consumers, or an order to change business practices or to stop doing business altogether.
– HealPay blogger, LaToya Irby.