Debt Collection: Understand Your Rights


Understand the rights granted to you under the Fair Debt Collection Practices Act.

If you’re on the receiving end of debt collection calls and letters, you may feel alone and unprotected. But the Fair Debt Collection Practices Act (FDCPA), enforced by the Federal Trade Commission (FTC), provides you with certain rights from debt collectors, including lawyers and in-house and third-party collection agencies.

Here’s a brief look at what is, and isn’t, allowed under the FDCPA. For more details, check out the Fair Debt Collection Practices Act.

Debt collectors must follow rules for contacting you. They cannot contact you early in the morning or late at night, and—if told—they cannot contact you at work. They cannot harass or abuse you, make false statements, use false company names, make statements meant to scare you (such as saying you will be arrested or that legal action will be taken against you if there’s no intent to follow through), or repeatedly call as an attempt to annoy you. If you feel these rules are not being followed, take these steps to stop harassment from debt collectors .

Debt collectors cannot discuss your debt with others. Other than you, your spouse, or your attorney, collection agencies cannot discuss your debt with any third parties. This does not, however, prohibit them from calling others. They can do so, but only to find certain information—your phone, address and place of employment. However, collection agencies usually cannot contact these individuals more than once.

Debt collectors must send you a validation notice, and you have the right to respond. Within five days of when they first contact you, collection agencies must send a written notice of how much you owe, the name of the creditor to whom you owe, and the method of repayment. Once you receive this letter, you have 30 days to send a letter to the collection agency asking for verification of the debt or stating that you don’t owe the debt or asking the agency to stop contacting you. (However, if the agency sends you written verification of the debt, they can begin contacting you again.)

Debt collectors may garnish your wages or your bank account. This will only happen, however, if the collection agency sues you in court, wins and obtains a garnishment order that directs your bank or employer to withdraw funds from your account or paycheck. (There are ways, however, to stop or reduce wage garnishment.)


Debt collectors must pay you if you prove they violated the FDCPA. If you feel a collection agency has violated the Fair Debt Collection Practices Act, you have the right to sue them within one year of the infraction date. If you can prove you suffered from illegal collection practices, and win the case in court, you can be reimbursed your attorney fees and court costs plus any damages, such as medical fees or lost wages. Even if you can’t prove you suffered actual damages, the judge can still award you up to $1,000. Note, however, that even if you do win a court case for illegal practices, this does not mean that your debt has been cleared.

The FDCPA offers powerful protection for consumers and covers any personal credit card debt, auto loans, mortgages and medical bills. (It does not cover business-incurred debt.) To maintain this protection, however, it’s important that you respond to any debt-related lawsuits by the date specified in the lawsuit. Otherwise, you may lose the rights granted under the FDCPA.

This article contains general information. Individual situations are unique; please, consult your attorney before utilizing any of the information contained in this article.

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Source: Neighborhood Link, Federal Trade Commission
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