Debt Collection and Consumer Rights

Most collection agencies follow the prescribed government guidelines for collecting debt. Unfortunately, there is a minority of companies and individuals who practice illegal means in an attempt to coerce individuals into payment. It is important to have an understanding of what the law regards as permissible behavior verses prohibited behavior. This law is clearly stated in the Fair Debt Collection Practices Act. Only by understanding the basics of debt collection and consumer right will an individual be able to protect themselves from unfair collection agency practices.

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• Calling an individual before 8:00 a.m. or after 9:00 p.m.
• Calling an individual at work if they understand (or should understand) that the employer prohibits it
• Using abusive or obscene language
• Publishing an individuals name in a list of "deadbeats"
• Calling repeatedly for the purposes of harassment
• Threatening physical violence
• Stating that non payment would be a criminal offense (this is false)
• Contacting an individual directly if known they are represented by an attorney.

• Collection agencies must stop contacting an individual if a written request is received. By law they retain the option of filing suit.
• Accurately identify themselves when making a phone call.
• Collectors must be truthful during the course of conversations.
• Inform the individual how much they owe, in writing.

Dealing with a collection agency quickly and honestly will generally result in a favorable outcome. Debt collection and consumer right can co-exist peacefully. However, in the event that the agency chooses to operate outside the bounds of the law it is important to take action. If a collection agency breaches the Fair Debt Collection Practices Act they are liable to pay for actual damages plus a penalty of up to $1,000.

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.