What Is the Fair Debt Collection Practices Act (FDCPA) and How Does It Work?

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (FDCPA) is a federal law that places restrictions on how debt collectors can act.

Under the FDCPA, it’s illegal for debt collectors to mislead debtors or use coercive or unfair methods when collecting or attempting to collect money. If a debt collection agency violates the FDCPA, the debtor can sue both them and the individual debt collector involved. 1

The FDCPA restricts when and how a debt collector can contact a debtor. It also limits which other people the collector is allowed to speak to about the debt.

How does the FDCPA work?

The FDCPA places various restrictions on debt collection companies. In particular, it limits how and when debt collectors can contact you. The FDCPA’s restrictions are described in detail below.

What does the FDCPA apply to?

The FDCPA doesn’t apply to all debts (or all debt collectors). It restricts the behavior of third-party debt collectors and people who work for debt collection agencies. It generally doesn’t apply to debts being collected by your original creditor (the person or company that first extended you credit). 2

This means that if your landlord is sending you angry text messages because your rent is late, you can’t invoke the FDCPA. However, if your landlord hires a lawyer or one of these listed debt collection agencies to collect your rent payments on their behalf, then the FDCPA applies.

Most types of debts can be collected by third-party debt collectors, including credit card debt, medical bills, student loans, auto loans, and mortgages. 3 The FDCPA has the potential to apply to all of those debts, but isn’t guaranteed to—again, it depends on who’s collecting them.

FDCPA restrictions on how debt collectors can contact you

Debt collectors are allowed to contact you by telephone, text message, email, or postal mail to collect a debt. 3 However, the FDCPA prohibits the following behaviors, which are considered debt collector harassment: 4

• Incessant calling 5
• Calls during the night (before 8 am or after 9 pm, your time)
• Calls to your workplace if you tell them you can’t receive calls at work
• Automated calls or prerecorded messages telling you to make payments

Preventing communication with “cease and desist” letters

The FDCPA prohibits debt collectors from contacting you at all if you ask them not to do so. You can ask them to stop by sending something known as a cease and desist letter. After you do so, legally they can only get in touch with you to confirm that they’re ending communications or that they’re filing a lawsuit. 3

This provides temporary relief from debt collection efforts, but it’s not necessarily a good idea. It means you won’t know what your debt collector is doing, and it also makes them more likely to sue you.

If you don’t want to risk being blindsided by a lawsuit, it’s probably best to give debt collectors some means to contact you (even if you limit the ways they can do this). However, if you do decide to write a cease and desist letter, send it by certified mail and pay for a return receipt to prove that the collector received it.

FDCPA restrictions on who debtors can contact

Under the FDCPA, if a debt collector doesn’t have your phone number, they can call your relatives, neighbors, or other people you know to ask for your contact details. However, they can only contact each person once, and the only person they can discuss your debt with is your spouse. 4

If you have an attorney representing you and you’ve let a debt collector know this, they must contact the attorney instead of you (unless the attorney is unreachable, in which case they may try to contact you).

Other types of communication that are banned under the FDCPA

In addition to the restrictions mentioned above, the FDCPA places several more restrictions on how debt collectors are allowed to communicate with you.

Specifically, the FDCPA prohibits them from doing the following:

Communicating unethically

Debt collectors can’t use obscene or profane language, and they can’t make excessively frequent phone calls. (The FDCPA doesn’t specify exactly what constitutes “excessively frequent.”)

If debt collectors attempt to collect the debt in person, any practices that are intimidating or threatening violate the FDCPA.

Threatening illegal action or making empty threats

It’s an FDCPA violation for debt collectors to threaten you with actions they aren’t legally able to take (e.g., taking money from your wages without a court order, seizing your property if it’s not legally permissible, or revoking your driving license). 4

Depending on which state you live in, debt collectors might or might not be allowed to threaten to sue you after the statute of limitations on your debt (the legal deadline for filing a collection suit) expires and it becomes time-barred debt. 3

Even if your state allows them to threaten a lawsuit, they can’t legally file it as long as your debt remains time-barred. If they do attempt to sue you, tell the judge that the statute of limitations has run out to get the case dismissed. Bring proof, such as papers documenting the date of your most recent payment.

Note that if you restart the statute of limitations by making a payment on the debt (or even promising to pay it), you’re opening yourself up to lawsuits once again.

Falsifying information about the debt or their identity

It’s illegal for a collection agency to falsely represent itself.

The Federal Trade Commission has received complaints about debt collectors posing as attorneys, credit reporting agency officials, and even police officers. 6 The FDCPA prohibits this, and many jurisdictions also have their own laws about it.

It’s also illegal for a debt collection agency to provide other false statements. In particular, they’re banned from:

• Claiming that you have committed a crime or that you can go to jail over for debt (which in most situations you can’t)
• Misrepresenting the amount you owe
• Threatening you with illegal actions or actions they don’t actually intend to take

They’re also not allowed to give false information about you to anyone else—including the three main credit bureaus, Equifax, Experian, and TransUnion.

If the debt collectors report false information to the bureaus, dispute the items on your credit report and consider speaking with an attorney.

Phantom debt collection

Phantom debt collection is the practice of coercing people into paying debts that are invalid either because they don’t exist or because the person in question doesn’t actually owe them.

Persistent attempts to collect an invalid debt—for example, one that’s obsolete or belongs to someone else entirely—can violate the FDCPA in a number of ways (e.g., if the debt collector provides you with misleading information).

Unethical debt collection practices that violate the FDCPA

There are a few other things that debt collection companies are prohibited from doing under the FDCPA when attempting to retrieve overdue debts:

Sharing information about the debt with third parties

As mentioned, debt collectors aren’t allowed to tell a third party about your debt without your written permission. What’s more, they’re not allowed to indirectly reveal your debt to others by sending you postcards or visible messages on social media. 7

Providing insufficient information or evidence of the debt owed

A common complaint made against debt collectors is that their notices are too vague and don’t give people enough information to figure out where the debt has come from. 6

If a debt collector contacts you about a debt, they have to provide certain important information about the debt, referred to as “validation information,” to help you identify it.

They can provide this information in one of two ways: 7

1. By stating it immediately (whether they’ve contacted you by phone or in writing)
2. By sending a debt validation letter within five days of contacting you

What debt collectors have to tell you in a validation notice

When debt collectors first contact you, or when they send you a written validation letter, they must provide the following information: 4

• How large the debt is (i.e., what you owe)
• The name of the person or company you owe the debt to
• Notice that you have 30 days to dispute the debt
• Instructions to follow if you don’t think the debt is yours

If they fail to do any of the above, they’re in violation of the FDCPA.

If you respond by disputing the debt, debt collectors must send you verification to prove that you owe the money, such as a copy of the original bill for the amount you owe or other evidence of a payment violation. 3

Debt parking

Debt parking is the illegal practice of adding unpaid debts to people’s credit reports without sending them a validation notice.

Victims of debt parking often don’t learn that it has happened until someone, like a prospective employer, landlord, or lender, checks their credit report and sees an unpaid debt. Because their car, house, or job is at stake, people often feel pressured to pay the debt, even if they don’t owe it. 8

Debt parking potentially violates not only the FDCPA but also another federal law called the Fair Credit Reporting Act, which regulates how credit information is reported and who can access consumer credit reports. 9

Garnishing wages

Debt collectors aren’t legally allowed to garnish your wages or bank accounts unless they get a court order to do so. This court order is known as a judgment, and it directs a bank or employer to turn over funds or wages to pay a debt. Even if debt collectors have a court order, many federal benefits are exempt from garnishment, including Social Security benefits, student assistance, and military annuities. 3

Sending misleading documentation

Debt collectors aren’t allowed to send you anything that looks like an official court or government document if it isn’t one. The reverse is also true: they also aren’t allowed to lead you to believe that papers they send you aren’t legal forms if they actually are. 4

Misusing postdated checks

The FDCPA forbids debt collectors from doing the following:

• Asking debtors to provide postdated checks with the intention of threatening or executing criminal prosecution (for instance, by trying to get you into legal trouble if you write a check when your account doesn’t have sufficient funds for them to cash it)
• Depositing or threatening to deposit a postdated check before your intended payment date
• Accepting a check that you post-dated by more than five days without sending a written warning of when they’re going to deposit it (which must be done 3–10 business days before the date of deposit)

As noted below, despite these protections, it’s generally safer to avoid writing postdated checks to debt collectors at all.

Employing other unfair practices

Other actions that debt collectors aren’t allowed to take under the FDCPA include:

• Seizing your property (if it’s not something you’ve agreed to use as collateral for a loan)
• Collecting or threatening to collect more than you owe on a debt (including fees and interest)

What to do if debt collectors violate the FDCPA: complaints and legal action

If you think that you’ve been treated unfairly by debt collectors, here’s what you can do.

Filing a complaint

If a debt collector fails to follow FDCPA law, you can file complaints with the following people and organizations:

• The Federal Trade Commission
• The Consumer Financial Protection Bureau
• Your state’s Attorney General

Many states have their own debt collection laws, in addition to federal laws, and some of these state laws cover the original creditor as well as third-party debt collectors. For instance, California has their own legislation covering debt collectors, known as the Rosenthal Fair Debt Collection Practices Act. 11

You can check with your state Attorney General’s office to learn more about your rights according to the laws in your state.

When reporting a FDCPA violation, back up your complaints with as much evidence as possible. Submit any records you have of your contact with debt collectors.

Other actions you can take under the FDCPA

If you believe that a debt collector has broken the law, you can take legal action against them in a state or federal court to claim damages and attorney fees. 3 You must do this within one year from the date of the alleged violation. 4