Debt Collection Laws and Rights.
Information on Fair Debt Collection
Debt collection laws provide fair debt collection by offering consumers protections in the rare cases where debt collectors mistreat these consumers during the pursuit of debt collection. There are debt collection laws on both the federal and state levels. For example, in the state of Illinois, the Fair Debt Collection Practices Act holds a lot of power as a federal law. But state debt collection laws like the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Collection Agency Act also provide protections for consumers. However, these debt collection laws do not erase or discharge any legitimate debts that a consumer owes. These debt collection laws merely regulate how a debt collector operates.
Among these debt collection laws, both federal and state, the Fair Debt Collection Practices Act, or FDCPA for short, ranks as the most important. It covers personal, family, and household debts, which include money owed for medical care, charge accounts, or car purchases. Most state debt collection laws are largely based somewhat on the FDCPA, providing similar protections and rights to consumers in the face of possible collection harassment and aiding in the regulation of the debt collection business.
According to debt collection laws, a debt collector is roughly defined as any person other than the creditor who regularly collects or attempts to collect debts that are owed to others that are the result of consumer transactions. This includes any attorneys who collect debts on a regular basis. Debt collection laws act not only to help consumers retain their privacy and dignity when confronting possible collection harassment, but also protect the debt collectors themselves from abusing their positions and injuring their public reputations.
Consumers should be aware of the following rights and protections that debt collection laws provide. While a debt collector may contact a consumer via mail, telephone, telegram, or email, he or she may not contact a consumer at unreasonable times and places without the debt collector's consent. For example, placing a call outside of the hours of 8:00 am to 9:00 pm local time is generally considered unreasonable. A debt collector also may not contact a consumer at their place of work if the debt collector has foreknowledge that such contact is not allowed or would affect the consumer's work status.
A debt collector may contact persons other than the consumer and the consumer's Fair debt Counselors to find out where the consumer lives or works. However, as per debt collection laws that protect privacy, he or she cannot tell anyone other than the consumer or the consumer's legal representation that the consumer owes a debt. Should a debt collector mention the debt to such a third party, he or she violates debt collection laws opens themselves up to a possible lawsuit on behalf of the consumer.
Once a debt collector has notified a consumer of the debt, debt collection laws state that, within 5 days, he or she must send the consumer a written notice detailing the amount of money owed, the name of the creditor to whom that amount is owed, and what actions to take if the consumer disputes the debt or a portion of that debt. Should a consumer dispute a debt, he or she has 30 days after receiving first notice of the debt to send a dispute letter to the debt collector asking for verification of the debt. Collection activities must cease until such verification is provided.
Certain standards are also demanded of debt collectors in the course of their work.
Debt collection laws forbid debt collectors from engaging in the following practices. They cannot harass, oppress, or abuse anyone nor make false statements while collecting a debt. They are not allowed to engage in unfair practices such as forcing a consumer to accept collect calls, pay for telegrams, or even collect interest or fees in excess of the debt, unless it was authorized beforehand by the agreement that created the debt.