Understanding Debt Collection Laws | Have You Been Illegally Targeted?

Plenty of consumers have received letters or phone calls about debts, but this doesn’t always mean that the debt collector is in the right.

Debt collection laws outline what debt collection companies can and cannot do—and you can take legal action if the collection agency has stepped over the line.

Even if you are in debt and are being pursued for a legitimate claim, you still maintain rights that can stop debt collector harassment.

About 30 million consumers in the U.S. have a minimum of one debt in collections, meaning that you might be subject to communication from a debt collector at one point in time. It’s important to know your rights.

Debt Collection Laws: Know Your Rights

Most of the rights for debtors fall under the federal Fair Debt Collection Practices Act, but your state might have additional debt collection laws in place that give you legal options to stop the debt collector harassment or to respond with litigation when you believe the law has been broken.

This law covers medical bills, mortgages, student loan payments, credit card debt, and other households debts. However, any debt related to a business venture are not protected under the FDCPA.

The federal law was enacted in 1977 by legislators in response to increasing pressure from consumers who stated that debt collection companies and businesses pursuing debts were harassing debtors.

Even though this law has been in place for decades, some debt collectors might count on a consumer’s lack of knowledge about their rights and participate in illegal practices anyways.

The FDCPA provides protection for consumers with regard to debt collection issues related to:

• Abusive or harassing behavior
• How debt collectors can communicate with you
• Unfair practices in debt collection
• Validation of debts
• Communication

If you think that a debt collector has violated the law in trying to contact you about a debt, you could have grounds for legal action.

In 2019, the Consumer Financial Protection Bureau announced new proposed debt collection rules that would put a cap of seven phone calls per week for debt collector communication.

If the debt collector reaches that cap, they would be forbidden from contacting the consumer again for at least one week.

However, this law would allow debt collectors to send unlimited texts or emails in pursuit of a debt.

Illegal Debt Collection Actions and Harassment

A debt collector cannot continue to communicate with you regarding a debt that you have shown is not yours.

As it relates to communication with you over a valid debt, a collector cannot repeatedly call or harass you, use profane language on the calls, present themselves as law enforcement authorities or threaten you with jail, publicly attempt to sell your debt, use any form of violence, or contact you without making it clear they are a debt collector.

When speaking with a debt collector, you have the right to ask questions and to receive an honest answer. It is an illegal debt collector practice for someone to misrepresent the amount of the debt, whether the statute of limitations has expired, or where they are calling you from.

A variety of actions fall under the umbrella of unfair debt collection practices, including adding on charges not allowed by the contract or state law in addition to the principal debt, depositing a post-dated check you’ve provided before the date on the check, or stating that they will take your property unless this is through a legal method.

Can a Debt Collector Call or Text Me?

Debt collection laws state that collectors cannot call you after 9 p.m. or before 8 a.m. unless you have agreed otherwise. If you have informed them that you cannot receive calls at work, the debt collector must discontinue this practice immediately.

Debt collectors are within the bounds of the law to discuss your debt with you or your spouse. If you have an attorney, the collector should contact that lawyer.

A debt collector could reach out once to people who know you and ask for your contact information, but should not continue communication with these third parties.

If you want to stop a debt collector from contacting you, send a letter through the mail requesting that they cease communication. After that information has been received by the collector, they can only contact you legally regarding certain actions like the filing of a lawsuit over this debt.

The Telephone Consumer Protection Act could also help you if the harassing behavior is carried out over the phone. Numerous businesses have been targeted in TCPA lawsuits for these practices.

If the company contacting you is using an autodialer, they could be in violation of the TCPA. You could be owed between $500 and $1,500 for each call violating your TCPA rights.

What if It’s Not My Debt?

You might need to communicate with the debt collector to determine whether or not you really owe this debt and to get more information about it. If you request details, the collector must send you written verification of the debt in question before they can continue with collection practices.

They need to provide you with the amount of the debt, the name of the creditor looking for payment, a statement that the debt remains valid unless you respond within a 30 day period, and details about the collector’s requirement to verify the debt via mail if you dispute the debt.

What if I Think My Debt Has Expired?

One common area for confusion has to do with old debts, which are covered under state laws. These statutes might include an expiration for certain kinds of debt, after which a debt collector can no longer communicate with you even if you at one time legitimately owed the money in question.

A survey of consumer protection attorneys showed that even though the laws are clear about debt collection practices, many companies still reach out over old debts.

The survey found that 89 percent of polled lawyers had recently represented a person who was being pursued by debt collectors after the debt expired.

Be aware that if you take certain actions, like making payment on the debt, that you could restart the debt collection time limit statute.

Any acknowledgement of the debt could be enough for the debt collector to re-open the option to sue you. These statutes relate to a company’s ability to sue you over the debt, so you might still receive communication about the debt in general. Check your state’s debt collection laws to determine if the right to sue expires.

If you are sued for a time-barred debt, you need a debt collection lawyer to help you fight back. If you take no action at all, this debt collector could get a court judgment and obtain a garnishment from you, so it’s important to take action if you believe this is illegal debt collection.

What if The Creditor Already Violated My Rights?

If a creditor has already engaged in illegal debt collection practices, you have two options. The first is to make a complaint with the Consumer Financial Protection Bureau, but this does not give you much avenue for recourse. Your second option is to sue the collection agency with the help of a consumer protection lawyer.

Have you experienced debt collector harassment? Tell us your story in the comment section below.

UPDATE: The Harassing Debt Collection Calls Lawsuit Investigation is now open! Submit your information here to see if you qualify to participate in a Class Action Lawsuit investigation.