Fair Debt Collection Practices Act

1977

Fair Debt Collection Practices Act Signed Into Law

The Fair Debt Collection Practices Act (FDCPA) was passed by Congress and signed into law by President Carter to

• address abundant evidence of the use of abusive, deceptive and unfair debt collection practices by many debt collectors
• promote fair debt collection practices
• protect consumers against debt collection abuses¹

1986

Fair Debt Collection Practices Act Amended

The FDCPA was amended to clarify that any attorney collecting debts on behalf of a client is covered by under the act.

1996

Fair Debt Collection Practices Act Amended

The FDCPA was amended to require debt collectors to include certain disclosures in their initial written communications with individuals.

2006

Fair Debt Collection Practices Act Amended

The FDCPA was amended to include exceptions for certain bad check enforcement mechanisms.

2010

Consumer Financial Protection Bureau Created

The passage of the Dodd-Frank Act established the Consumer Financial Protection Bureau as an enforcer of the FDCPA in addition to the Federal Trade Commission—requiring the two agencies to consult with each other and enter into an agreement coordinating enforcement.

2011 – 2019

Consumer Financial Protection Bureau and Federal Trade Commission Agree to Coordinate Enforcement of the Fair Debt Collection Practices Act

In 2011, the Consumer Financial Protection Bureau and the Federal Trade Commission formally entered into an agreement—and reauthorized the agreement in 2015 and in 2019—outlining how the two agencies

• coordinate shared enforcement of the FDCPA
• share consumer complaints
• collaborate on consumer education²

2021

Consumer Financial Protection Bureau Regulations Went into Effect

In November 2021, the Consumer Financial Protection Bureau's regulations (Regulation F)—issued in 2020 and 2021—went into effect. The regulations clarified—and in some cases, expanded on—the requirements for FDCPA Debt Collectors. Among the changes, the regulations

• updated what information a debt collector must provide to a consumer
• provided a new model notice for debt collectors to use when notifying consumers
• prohibited debt collectors from bringing or threatening legal action on debts for which the statute of limitations has expired.

12 CFR Part 1006 - Fair Debt Collection Practices Act (Regulation F)

The Fair Debt Collection Practices Act (FDCPA) applies to debt collectors—individuals or businesses who regularly try to collect debts owed (or asserted to be owed) or due to another.
These can include collection agencies, debt buyers (companies that buy past-due debts from creditors or other businesses and try to collect them) and attorneys who regularly collect debts as part of their business.

The FDCPA only applies to companies that collect debts for others. The following are not subject to the law:

• a creditor that collects its own overdue accounts
  • in-house collections are covered if they create the impression that they are either an independent collector or a governmental agency
  • state collection laws (i.e. California's Rosenthal Fair Debt Collection Practices Act) may apply to both outside and in-house collection activities
• government employees whose job is to collect debts as an official duty (e.g. for the Internal Revenue Service)
  • when the government refers collection of debts to an outside agency, the FDCPA applies
• consumer credit counseling services, if the service is a nonprofit organization and receives payments from the debtor for distribution to creditors
• debts incurred to run a business

Communication in Connection with Debt Collection³

The Fair Debt Collection Practices Act (FDCPA) regulates when and how a debt collector may communicate with a person allegedly obligated to pay a debt, and with third parties in connection with the collection of a debt.

It generally prevents debt collectors from communicating—in connection with the collection of a debt—with

• anyone other than the person who allegedly owes that debt
• the person’s spouse (parent or legal guardian, if the person is a minor)⁴
• the person’s attorney⁵ (if the debt collector is aware of one)
  • If the debt collector knows the individual is represented by an attorney, the collector must first attempt to communicate with the attorney instead.⁶

A person’s first contact with a collection agency is likely to be a telephone call. The FDCPA requires a collection agency to explain how to contact the collector in writing. The law also requires a collection agency to send a written notice five days after its first contact. The notice should include

• the amount of the debt
• the name of the creditor
• a statement that—if the individual notifies the debt collector in writing within the 30-day period that they are disputing the debt—the collector will obtain verification of the debt or a copy of a judgment
• a statement that the collector will—upon request—provide the person with the name and address of the original creditor, if different from the current creditor
• a warning stating: "This is an attempt to collect a debt and any information obtained will be used for that purpose."

In addition, a debt collector must notify an individual about a debt before reporting the debt to a credit bureau.

False or Misleading Representations⁷

A debt collector may not use any false, deceptive or misleading representations while collecting a debt—including (but not limited to)⁸

• falsely communicating or implying that the debt collector is affiliated with the government
• the false representation of the amount, character or status of any debt
• falsely communicating or implying that nonpayment of the debt will result in
  • arrest or imprisonment 
  • seizure or garnishing of wages or property
• the threat to take any action that cannot legally be taken (or that is not intended to be taken)
• the failure of a debt collector to communicate that a disputed debt is disputed
• the use of any false representation or deceptive means to collect or attempt to collect any debt or obtain information concerning a consumer
• the failure to disclose in the initial communication with the person (if the communication is oral, in that conversation) that it is from a debt collector attempting to collect a debt
• falsely communicating or implying that the debt collector is or is employed by a consumer reporting agency

Acquisition of an Individual’s Location Information⁹

The FDCPA contains specific requirements for debt collectors attempting to collect location information about a person from a third party. Any debt collector attempting to do so must

• identify themselves and, if expressly requested, identify their employer
• not mention that the individual owes any kind of debt
• not include language or symbols on the envelope for the communication that indicates that it comes from a debt collector
• not communicate by postcard
• not communicate with any person other than the individual’s attorney, if the debt collector knows the person is represented by an attorney and can ascertain the attorney’s contact information

Validation of Debts

Within five days of the initial communication with the person, a debt collector must let them know that they have 30 days to assert the right to dispute the validity of the debt or any portion of the debt.

When a person notifies the debt collector that a debt is disputed, the debt collector must then obtain verification of the debt and send that verification to the them (or their attorney). Additionally, the debt collector must provide the person with the name and address of the original creditor, if different from the current creditor (e.g. the original debt was purchased or transferred to a third party). While a debt is being disputed, the debt collector must cease attempting to collect that debt.

Unfair Debt Collection Practices

A debt collector is prohibited under the law from using unfair or unconscionable means to collect (or attempt to collect) any debt—including (but not limited to)

• attempting to collect any amount not expressly authorized by the agreement creating the debt or permitted by law
• causing anyone to accrue charges for communications (i.e. telephone fees) by concealing the true purpose of the conversation
• communicating by postcard with the person regarding a debt
• taking or threatening to take actions to repossess or take possession of property, if there is no right to do so
• adding anything other than the debt collector’s name (or business name, if the business name does not reveal that they are in the debt collection business) and address on the exterior of an envelope when communicating with a person by mail

Additionally, it is unlawful for anyone to design or furnish forms that would create the false impression that the person furnishing the form is a debt collector acting on behalf of a creditor, when they are not in fact acting as a debt collector on behalf of that creditor. Any person who violates this prohibition will be treated as a debt collector under the FDCPA, even if they would not otherwise qualify as a debt collector (e.g. they do not regularly attempt to collect debts).

Receive Communications from Debt Collectors at Usual Times or Convenient Places¹⁰

Debt collectors are generally prohibited—absent the express permission of a court or the consent of the person—from communicating with them at any unusual time or place, or a time or place which should be known to be inconvenient* to them.

Absent any knowledge to the contrary, debt collectors must assume that any time before 8 am and after 9 pm is inconvenient 

A debt collector may attempt to communicate at a person’s place of work, unless the debt collector knows or has reason to know that the person's employer prohibits them from receiving that kind of communication.

In addition, a debt collector may not call a person more than seven times within a seven-day period per debt, and must generally wait a week after speaking with them before making another call regarding a particular debt.¹¹

When debt collectors contact a person through social media, they must keep messages private and identify themselves as a debt collector.

Cease Communication with Debt Collectors¹²

A person may notify a debt collector that they refuse to pay a debt or wish the debt collector to cease further communication with the them. Upon receipt of the notice, the debt collector must cease communicating with that person—except to notify them that they may or will be moving forward with other remedies for the debt. 

A person may also opt out of any specific means of communication (e.g. text messaging, email, phone calls, social media platforms).

Communicate Without Being Subject to Harassment or Abuse¹³

Debt collectors are prohibited from engaging in any conduct the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of a debt—including (but not limited to)

• the use or threat of use of violence, or other means to harm the physical person, reputation or property of any person
• the use of obscene or profane language
• the publication of a list of people who allegedly refuse to pay debts
• causing a telephone to ring or engaging any person in conversation repeatedly or continuously with the intent to annoy, abuse or harass any person
• the placement of any telephone call without meaningful disclosure of the debt collector’s identity

Dispute Debts¹⁴

A person may notify a debt collector in writing within 30 days of the initial communication that the debt (or just a portion of the debt) is disputed. While a debt is disputed, a debt collector must cease collection of the debt until they can obtain verification of the debt. If the debt collector can verify the debt, they must send a copy of the verification to the person.*

A person’s failure to dispute the validity of a debt is not an admission of liability.¹⁵

Control Payments for Multiple Debts

If a person owes multiple debts and makes a payment to a debt collector, they may control to which debts that payment is applied. Additionally, a debt collector may not apply that payment to any debts that are disputed. 

Be Notified Before a Credit Reporting Agency

Before a debt collector may submit information about someone to a consumer reporting agency, that debt collector must first speak to the person about the debt (either in person or by telephone) or at least send information about the debt to the individual by mail or electronic message and wait long enough for the person to respond.¹⁶

Sue 

If a debt collector violates the Fair Debt Collection Practices Act, a person may file a lawsuit within a year of the date their rights were violated.

Individual Enforcement

A person may enforce their rights directly against debt collectors that violate the Fair Debt Collection Practices Act (FDCPA) by suing to recover

• actual damages sustained as a result of the violation
• additional damages at the discretion of the court (up to $1,000 with some additional restrictions for class actions)
• legal costs and attorney’s fees (in the case of a successful lawsuit)

In an individual lawsuit against a debt collector, the court considers the frequency and persistence of the violation—as well as the intent of the debt collector. A debt collector will not be held liable for a violation if the debt collector can show that the violation was unintentional or the result of a bona fide error.

Federal Agency Enforcement

Both the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) enforce the FDCPA.¹⁷ This involves regular meetings to discuss

• ongoing and upcoming law enforcement
• rulemaking
• the sharing of debt collection complaints
• coordination of consumer education efforts and initiatives

The CFPB is required to present an annual Fair Debt Collection Practices Act report to Congress on its administration of its FDCPA responsibilities.

State Enforcement

The FDCPA does not preempt stronger state laws. Additionally, a debt collector’s compliance with the FDCPA does not impact the debt collector’s compliance or noncompliance with other state laws that cover debt collection.

1. 15 U.S.C. § 1692(a).
2. See Memorandum of Understanding between the Consumer Financial Protection Bureau and the Federal Trade Commission (Feb. 2019).

3. 15 U.S.C. § 1692c; see also CFR §1006.6.

4. 12 CFR §1006.6(a).

5. 15 U.S.C. § 1692c(b). A debt collector may also communicate with a consumer reporting agency if otherwise permitted by law, the creditor or the attorney of the creditor.

6. 15 U.S.C. § 1692c(a)(2).

7. 15 U.S.C. § 1692e; see also CFR §1006.18.

8. 15 U.S.C. § 1692e(1)-(16).

9. 15 U.S.C. § 1692b; see also CFR §1006.10.

10. 15 U.S.C. § 1692c(a); see also CFR §1006.6(b).

11. 12 CFR § 1006.14(b)(2)(i).

12. 15 U.S.C. § 1692c(c); see also CFR. §1006.6(c).

13. 15 U.S.C. § 1692d; see also CFR §1006.14.

14. 15 U.S.C. § 1692g(b).

15. 15 U.S.C. § 1692g(c).

16. 12 CFR Part 1006.30(a). This section does not apply when a debt collector is providing information to a consumer reporting agency that compiles and maintains information on a consumer’s check writing history.

17. See Memorandum of Understanding between the Consumer Financial Protection Bureau and the Federal Trade Commission (Feb. 2019).