The Fair Debt Collection Practices Act
If your business extends credit to its customers or allows the purchase of goods and services on account, you should be aware of your customers' rights under the federal Fair Debt Collection Practices Act (FDCPA). The FDCPA requires that debt collectors treat debtors fairly, and prohibits certain methods of debt collection. This article answers commonly asked questions about the FDCPA.
What debts are covered?
Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.
Who is a debt collector?
A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis. Keep in mind that the FDCPA applies only to persons who regularly collect debts owed to someone else, but not to creditors collecting their own debts.
Note: the FDCPA likely will not apply to your business itself as it contacts delinquent customers, but will apply to any debt collection agency (or similar company) that your business hires to collect outstanding debts.
How may a debt collector contact a debtor?
A collector may contact a debtor in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact a debtor at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless the debtor agrees. A debt collector also may not contact a debtor at work if the collector knows that the debtor's employer disapproves of such contacts.
Can a debtor stop a debt collector from contacting him or her?
A debtor can stop a debt collector from contacting him or her by writing a letter to the collector telling them to stop. Once the collector receives the debtor's letter, they may not contact the debtor again except to say there will be no further contact or to notify the debtor that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if the debtor actually owes the debt. The debtor could still be sued by the debt collector or the original creditor.
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Source: Federal Trade Commission
