Hi. I’m Daniel Dwyer, an attorney with the Federal Trade Commission. The FTC enforces the law that makes it illegal for debt collectors to use abusive, deceptive, or unfair practices to try to get someone to pay what they owe.
If you’re in the debt collection business, it’s up to you to comply with that law – which is called the Fair Debt Collection Practices Act.
The law restricts when you can contact people and who you can call. For example, you can’t call before 8 in the morning or after 9 at night – and you can’t discuss a debt with anyone other than the person who owes the money.
If you don’t know how to reach the person, the law allows you to contact someone else once – once -- to find out the person’s address, home phone, or where they work. But other than that, you’re not permitted to talk to anyone other than the person who owes the debt, their spouse, or their attorney.
Within five days of contacting a person about a debt, your job is to send them a validation notice listing who they owe money to, how much money 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 you to contact them, the law is clear: You can’t contact them. But 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.
Other practices that are off limits for debt collectors:
*It’s illegal to threaten violence, use obscene language, or call people repeatedly to annoy them.
*It’s illegal to lie – about anything when you’re trying to collect a debt. For example, 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 looks like an official document from a court or government agency in an attempt to deceive someone.
*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?
Make sure you’re complying with the Fair Debt Collection Practices Act. Once again:
*Contact people only in the way the law allows.
Send people who owe money a written validation notice within five days of your first contact. And if they ask you not to contact them again, honor that request.
Don’t participate in any abusive, deceptive, and unfair practices. They’re illegal and can lead to private litigation – and government enforcement.
Establish clear standards for your employees – and implement a system to make sure they follow them.
And finally, remember that the Fair Debt Collection Practices Act applies to all collection activity, including sending text messages and using social media.
If you’re interested in more information about the Fair Debt Collection Practices Act, visit our Business Center at business.ftc.gov. And while you’re at it, sign up for our business blog at business.ftc.gov/blog.