I’m Deanya Kueckelhan, an attorney with the Federal Trade Commission – the FTC is the agency that enforces the law that makes it illegal for debt collectors to use abusive, deceptive, or unfair practices.
When a consumer gets behind with their bills, they may hear from a debt collector. If you’re in the debt collection business, it’s up to you to comply with the Fair Debt Collection Practices Act.
Under the law, there are specific restrictions on when you can contact people and who you can call. For example, you can’t call at inconvenient times – that is before 8 in the morning or after 9 at night.
As a general rule, it’s illegal to discuss a debt with anyone other than the person who owes the money.
I f you don’t know how to reach them, you can contact someone else once to find out their address, home phone, or where they work. But other than that, you shouldn’t talk to anyone other than the person who owes the debt, or their spouse, or their attorney.
Within five days of contacting a person about a debt, send them a validation notice listing who they owe, how much they owe, and what they should do if they think there’s a mistake about the debt.
If someone lets you know that they don’t want to be contacted , then the law is clear: You can’t contact them. Now, there are two exceptions: You can let them know that there won’t be any more contact – and you can let them know that you or the creditor plan to take a specific action, like filing a lawsuit. The law makes certain practices off limits for debt collectors:
For example, it’s illegal to threaten violence, use obscene language, or call people over and over again to annoy them.
Debt collectors can’t lie when they’re trying to collect a debt.
You can’t claim that you’re an attorney or that you work for the government if that’s not true.
You can’t say a person will get arrested for not paying a debt.
You can’t send paperwork that tries to deceive the recipient by looking like an official document from a court or government agency.
And you can’t say you’ll seize a person’s property or garnish their wages unless you have the legal right to do that, and you actually intend to follow through.
So what’s the bottom line for people in the debt collection business?
Well first, make sure you’re taking the steps required by the Fair Debt Collection Practices Act. That is, contact people only in the way the law allows. Send people who owe money a written validation notice within five days. And if they notify you that they don’t want to be contacted again, then honor their request.
Second, abusive, deceptive, and unfair practices are illegal and they can lead to private litigation – and government enforcement.
Third, to ensure compliance, establish clear standards for your employees – and make sure they follow them.
If you’re looking for more information about the Fair Debt Collection Practices Act, then visit our Business Center at business.ftc.gov.