Debt Collection Laws: What Do I Need to Know?

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Debt collection laws protect you from unfair debt collection practices. Under federal and state laws, debt collectors must follow certain rules — and you have certain rights as well. If you have collectors contacting you, be aware of the major debt collection laws. 

Our guide gives you an overview of your rights and the rules debt collectors must follow. 

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What Debt Collection Laws Should I Know About?

There are a few key debt collection laws that can help protect you and your credit score. Here are the main laws to know about:

Fair Debt Collection Practices Act (FDCPA)

The FDCPA specifically outlines what debt collectors can and cannot do. By law there are rules they must adhere to and certain tactics they can’t use, such as being deceptive or abusive. There are also certain hours they can and cannot call you. The FDCPA covers debts like credit cards, mortgages and medical bills.

Fair Credit Reporting Act (FCRA)

Thanks to the FCRA, you’re legally allowed to know what’s in your credit report and dispute any errors. By having an accurate credit report, lenders, employers and insurance companies have a clearer idea of your creditworthiness. 

State LawsMost states have debt collection laws that are similar to the federal ones. Some also have Unfair and Deceptive Acts and Practices that may include laws related to debt collection. While these laws vary, in general, they help regulate debt collector practices so the consumer isn’t tricked or abused into more payment

Can a Debt Collector Call Me at Work?

Under the FDCPA, debt collectors aren’t allowed to call you at inconvenient or unusual places, which may include your workplace. For example, hospitals, schools and restaurants are examples of workplaces that qualify. 

No matter where you work, you have the right to tell the debt collector to stop calling you at work. You can tell them that due to the FDCPA, they cannot call you at your place of employment. If they persist, you can file a complaint with the Federal Trade Commission or your state’s attorney general office. 

When Can a Debt Collector Call Me?

By federal law, debt collectors aren’t allowed to contact you at unreasonable times — they can only call you between 8 a.m. and 9 p.m. your local time. If they call you outside of those hours, it’s an FDCPA violation. 

A debt collection agency can contact you by phone, mail, fax or email. If you don’t want a debt collector to contact you — or to contact you in a certain way — you can tell them to stop or specify how you prefer to be contacted.

By law, they must end communication with you unless they’re advising you that their efforts are being terminated or to inform you that the collector might invoke specified remedies for payment.

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Who Can a Debt Collector Call?

Debt collectors can only discuss your debt with you, your spouse, your attorney, your executor or your parents (if you’re a minor), but they can call other relatives or friends to look for you. When contacting those other people, they cannot say they’re with a debt collection agency and they cannot call that person a second time. 

Here’s the type of info debt collectors can receive from other people: 

  • Your address
  • Your phone number
  • Your place of employment

What Can Debt Collectors Say?

Debt collectors cannot say things about your debt that are abusive, deceptive or lies. By law, you’re able to request anything they say in writing — such as how much you owe and to whom — before you make any payments. 

Here’s what debt collectors can’t say or do: 

  • Harass you
  • Lie to you
  • Threaten you with harm or violence
  • Use profane language
  • Misrepresent what you owe
  • Falsely claim that you could be arrested
  • Call you repeatedly to bother you
  • Collect fees and interest on top of the actual amount you owe, unless the agreement included additional accrual of fees or interest.
  • Take or threaten your property (unless it’s legal, like in the case of a secured loan with your vehicle as collateral) 

How Much Can Debt Collectors Ask For?

A debt collector can only ask for the amount you owe including outstanding fees, charges and interest not paid — but cannot ask for more on top of that. Debt collectors must send you a written validation letter within five days that specifies how much you owe and to whom. 

If you feel a debt collector is asking for more than you actually owe, send a letter stating and proving that you don’t owe that amount or ask for verification of the debt. You must send your response letter within 30 days of being contacted by a debt collector, or the amount originally stated is assumed as true.

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Can I Ask the Debt Collector for Their Name?

Yes, you can ask the debt collector for their name and the name of the company they are collecting for. If they don’t give you their name or you feel it’s a suspicious company, request a debt verification letter. Within five days, they must send you a written notice with the details of the debt including the name of the company and how much you owe. 

What Does a Debt Verification Notice Include?

A debt verification notice includes details about what you owe and to whom. Debt collectors are obligated to send it to you within five days of their initial contact. 

Here’s what a debt verification notice should include:

  • Amount of the debt you owe
  • Name of the creditor
  • A statement that the debt is assumed as valid unless you dispute within 30 days of the first contact
  • A statement that if you dispute the debt or ask for more info within 30 days, the debt collector must verify the debt in writing by mail
  • A statement that if you request info about the original creditor, you should receive it within 30 days 

By law, you have a right not to further communicate with debt collectors or pay the debt until it is verified.

Can I Ask a Debt Collector to Stop Contacting Me?

Yes, you can ask a debt collector by phone or mail to stop contacting you and they must oblige. You can officially state in a cease and desist letter that you don’t want the debt collector to contact you further.

They can only contact you from that point on to advise you that their efforts are being terminated or to tell you what the debt collector will do next. 

If they don’t stop contacting you, you can report the debt collector to the Federal Trade Commission or your state’s attorney general. 

What Should I Do If a Collector Violates Debt Collection Laws?

If a debt collector violates any of the debt collection laws, you should file a complaint. 

You can report a debt collector to:

  • The Federal Trade Commission
  • Your state’s attorney general
  • Consumer Financial Protection Bureau (CFPB)
  • The Association of Credit and Collection Professionals
  • The Better Business Bureau

How Can I Avoid Scams?

Debt collectors are legally prohibited from unfair practices, but you should still be aware of suspicious tactics. You want to avoid scams that could harm you financially. 

Understand the Statute of Limitations on Your Debt

Before proceeding, make sure you understand if the debt is something you legally owe or not. If the statute of limitations has passed — meaning how long a lender can collect that debt — then you’re not legally obligated to pay it.

For example, a credit card debt might be time-barred, or too late for the defense to win in court if they were to sue you over it. 

The statute of limitations depends on the type of debt and the state you live in, or the state listed in your credit contract. If you’re not sure if you legally owe the debt, be sure to ask for a debt validation letter.

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You may also want to talk with an attorney before making a decision on whether to pay. Paying for even part of a debt can cause more harm than good, because it restarts the statute of limitations and enables the collector to sue you for payment. 

No matter what, you still need to respond to any debt collector that says you owe money. If you ignore a debt collector or a lawsuit, the collector could get a court judgment and garnish wages from you. 

Understand What Happens When You Make a Payment

Making a payment acts as representation that you accept the debt as yours and makes it more difficult to dispute it later on.

If you make a payment on a debt that’s time-barred, the payment can restart the statute of limitations and is considered your debt to pay depending on the state you reside. That’s why it’s critical to know your rights and verify the debt before making even a partial payment. 

Know the Signs of a Scam

Recognize when a debt collector might be a scam to avoid paying for something that’s not yours or a debt that’s outside the statute of limitations. 

Here are the main signs of a debt collection scam or practices to be wary of:

  • They don’t send you a debt validation letter complete with how much you owe and to whom you owe it
  • They charge you extra fees and interest beyond what you owe
  • They threaten to sue you over payment
  • They tell you that you have to pay right away (even over the phone)
  • They lie to you, such as saying if you pay a small amount they’ll wipe out the rest of the debt
  • They seem fake or dishonest
  • They keep contacting you after you’ve asked them to stop

Do I Need an Attorney?

An attorney isn’t required when dealing with debt collectors but they can help your situation so you don’t end up paying more than you owe or for debt that isn’t even yours. An attorney can also help you identify and dispute collection errors, or other error types on your credit report that might be bringing down your credit score. 

Consider an attorney if you feel like you’re swimming in debt, have debt collectors calling you and you’re not sure what to do, or you have questions about your situation. Getting professional help can save you money and time in the long run. 

How Do Debt Collections Affect My Credit?

Debt collection can lower your credit score because it’s debt that’s past due or never paid. Lenders want to see that you’re a responsible borrower and if your debts have gone to collections, it means you failed to pay it back on time. 

Paying off debt, whether through a collections agency or other means can improve your score. It may lower your debt utilization ratio because you’re using less of your available credit. It may also lower your debt-to-income ratio, which is another factor in your credit score. Making on-time payments and paying off your debt are great ways to repair your credit

You can research each law thoroughly to protect yourself and know your rights or reach out for professional help. Debt collection laws can be tricky to navigate, especially when you’re not familiar with them. Professional help can alleviate stress and clear up uncertainties if you have questions, especially if you feel like something is unfair or incorrect. 

Although Lexington Law does not manage debt collection, they are a great resource for learning how to navigate credit repair. Contact Lexington Law today to learn how credit repair can help you.