Federal laws clearly prohibit debt collectors from using tactics that annoy, harass, or otherwise unfairly burden consumers. But some debt collectors are not following the rules, and many are even pushing for a broader range of exceptions that would allow them to harness the power of new technologies like social networking and text messaging to contact debtors.
Current Federal Law: The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (sometimes referred to as the FDCPA) is the most comprehensive piece of federal legislation protecting consumers from improper debt collection efforts. Enforced by the Federal Trade Commission, the FDCPA sets limits on where, when, and how debt collectors may contact you.
The FDCPA applies to personal debts such as credit card obligations, home mortgages, and auto loans; it will not protect you from those seeking to collect a business debt. The law applies only professional debt collectors, but that term is defined broadly to cover anyone who regularly collects debts owed to others. This includes collection agencies, certain lawyers, and firms that purchase delinquent debts in order to collect them.
So what is and is not prohibited by the FDCPA? A debt collector is allowed to get in touch with you about an outstanding obligation. However, they may not do so before 8 a.m. or after 9 p.m. unless you have specifically told them otherwise. Furthermore, collectors may not contact you at other times or places they know are inconvenient for you. This may include your workplace: if collectors are told either orally or in writing that you are not permitted to take phone calls at your job, your work number is off limits.
Debt collectors may attempt to get some information about you from others-but in most cases they can only contact third parties a single time, and they may only ask about your address, home phone number, and where you are employed.
If you make a written request asking a debt collector to stop contacting you, they are prohibited from continuing to do so unless it is to inform you they will honor your request or to make you aware of a specific action, such as filing a lawsuit against you. If you retain an attorney to help you deal with your debt, all communications from a debt collector must go directly to your attorney.
Harassment is Clearly Forbidden
Harassment (including threats of violence or the use of obscene language), making false statements, and trying to collect additional unfair fees or charges are never permissible under the FDCPA.
If a debt collector violates any provision of the FDCPA in dealing with you, you should report the infraction to your state Attorney General's Office and the Federal Trade Commission. In addition, you may sue debt collectors who violate the FDCPA to recover for damages you incurred in relation to their illegal activity as well as up to a $1000 penalty, court costs, and your attorney's fees.
The Telephone Consumer Protection Act
Another federal law, the Telephone Consumer Protection Act ("TCPA") also affords some remedies against overzealous debt collectors.
Although the TCPA was enacted primarily to address unsolicited telemarketing efforts, it is also applicable when collectors attempt to contact you on your cell phone via an automatic dialing system or using prerecorded messages. Unless you have expressly consented to this form of contact (you should be cautious about putting cell phone numbers on loan applications, as this may amount to consent), collectors employing such methods could be strictly liable to you for $500 to $1500 in damages per call.
New Collection Tactics
As technologies such as email, cell phones, and social networking websites like Facebook become more pervasive in society, debt collectors are increasingly using them to seek payment.
The limitations that the FDCPA and the TCPA place on collection practices apply just as much to Facebook and text messaging as they do to landline and face-to-face communication. But because debt collection companies know that enforcement is more difficult and the likelihood of reporting lower, many of them push the envelope in online and mobile device behavior, even if it means opening themselves up to potential penalties.
Not everyone agrees that contacting debtors through Facebook or their email accounts will lead to higher returns for debt collectors. Even so, the trade group the Association of Credit and Collections Professionals released a proposal in June seeking amendments to the FDCPA, the TCPA, and other consumer protection laws that would bring debt collection into the information age.
The changes the Association of Credit and Collections Professionals is seeking include eliminating distinctions between cell phones and landlines in the FDCPA and TCPA, allowing creditors to use email communications in collection efforts when provided with an address, and granting debt collectors an exception to TCPA restrictions regarding autodialers or prerecorded messages.
Giving Debt Collection More Tools Would Be Bad for Consumers
Despite the protections in current federal law, is not uncommon for debt collectors to use text messaging and Facebook posts to achieve their goals. Many experts express concern about expanding how debts could be collected when the industry already has trouble operating within the bounds of the law: the Federal Trade Commission received some 108,000 complaints against debt collection companies in 2010.
If you are dealing with debt, you need to consider all of your options. One of those options, of course, is bankruptcy, which remains a viable choice for many people.
But whether you file for bankruptcy or not, you need a plan to pay down your debts. And you don't need debt collectors illegally breathing down your neck while you execute that plan.
The law governing debt collection is relatively simple: do not harass, mislead, or invade the privacy of debtors. Yet debt collection companies are often not able to live up to these standards even in traditional mediums of communication. Inviting debt collectors to further invade intimate personal media spaces should not be allowed.