The Fair Debt Collection Practice Act (FDCPA) is a statute that was added to the Consumer Credit Protection Act by Congress in 1978. The FDCPA sets forth guidelines for debt collection practices in order to protect consumers from abuse, allow for the validation of alleged debts, and ensure the rights of consumers. The FDCPA governs many different types of debt collectors, whether they be a dedicated agency, an individual, or a practicing attorney.
Practices Forbidden by FDCPA:
The FDCPA prohibits debt collectors from engaging a variety of behaviors or practices considered to be abusive or unethical. For example, debt collectors may only contact a debtor during "normal" hours, defined as the time between 8 AM and 9 PM, unless permitted to do otherwise by the debtor.
In general, consumers' rights are heavily guarded by the FDCPA. Under the statute, a debtor can force a collection agency to refrain from further contact by a simple written notice. The only exceptions to this rule are a) notifying the consumer that collection efforts have ceased, and b) notifying the consumer of any further action, such as a lawsuit, that the creditor intends to pursue.
Protocol Required by FDCPA:
The FDCPA also obligates debt collectors to provide certain information about themselves and the creditor they represent. They must identify both themselves and the creditor, including both name and address, inform the consumer of their right to dispute the debt, and provide validation of a debt in the case of a formal dispute.
Debate over FDCPA:
The process of debt collection is stringently regulated and highly technical. The FDCPA's provisions are enforced by the Federal Trade Commission. Furthermore, violations of the FDCPA also allow the affected private citizen(s) to sue to recover compensation up to $1,000, plus any damages caused by the violation.
Not everyone is happy with the FDCPA as it stands, however. In fact, the FDCPA has come under fire from both consumer advocates and industry representatives. In the former case, consumer advocates feel that the penalties allowed by the FDCPA are not sufficient deterrents to abusive collection practices, partially due to the fact that fines have not been scaled to inflation. On the other hand, the collection industry complains that the heavy regulations of the FDCPA promote frivolous and time-consuming lawsuits over minor technical details, and thus impedes their ability and right to collect on valid, legitimate debts.
Practices Forbidden by FDCPA:
The FDCPA prohibits debt collectors from engaging a variety of behaviors or practices considered to be abusive or unethical. For example, debt collectors may only contact a debtor during "normal" hours, defined as the time between 8 AM and 9 PM, unless permitted to do otherwise by the debtor.
In general, consumers' rights are heavily guarded by the FDCPA. Under the statute, a debtor can force a collection agency to refrain from further contact by a simple written notice. The only exceptions to this rule are a) notifying the consumer that collection efforts have ceased, and b) notifying the consumer of any further action, such as a lawsuit, that the creditor intends to pursue.
Protocol Required by FDCPA:
The FDCPA also obligates debt collectors to provide certain information about themselves and the creditor they represent. They must identify both themselves and the creditor, including both name and address, inform the consumer of their right to dispute the debt, and provide validation of a debt in the case of a formal dispute.
Debate over FDCPA:
The process of debt collection is stringently regulated and highly technical. The FDCPA's provisions are enforced by the Federal Trade Commission. Furthermore, violations of the FDCPA also allow the affected private citizen(s) to sue to recover compensation up to $1,000, plus any damages caused by the violation.
Not everyone is happy with the FDCPA as it stands, however. In fact, the FDCPA has come under fire from both consumer advocates and industry representatives. In the former case, consumer advocates feel that the penalties allowed by the FDCPA are not sufficient deterrents to abusive collection practices, partially due to the fact that fines have not been scaled to inflation. On the other hand, the collection industry complains that the heavy regulations of the FDCPA promote frivolous and time-consuming lawsuits over minor technical details, and thus impedes their ability and right to collect on valid, legitimate debts.
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