The Fair Debt Collection Practices Act (FDCPA) has guidelines enforced by the Federal Trade Commission (FTC) to regulate and ensure fair debt collections. This act came into existence to address consumer complaints of overly aggressive and abusive behavior by debt collectors. Any personal or household debt that is not related to a personal or family owned business is covered under this act. This includes money owed for personal loans, auto loans, mortgages, credit cards and medical bills. Unfortunately,the FDCPA guidelines do not apply to your business debts. Understanding the FDCPA guidelines can shield you from many troubles and strengthen you with the information to report violations of the act.
Third party debt collection agencies and debt collectors employed by these agencies are guided by the FDCPA guidelines. There are some debt collectors, whose activities are not restricted by the FDCPA guidelines. The parties who are excluded from the Act are:
* In-house collection agents i.e. the creditors who collect their own debts
* Banks that collect their own debts
* Certain credit card companies
In all this a debt incurred for a business purpose and the debtor who incurred the debt for business purpose are not protected by the FDCPA.
Under the FDCPA a debt collector has a right to call you to request a payment for a debt they think you owe. However, he must validate the debt in the absence of which you can dispute the debt. You can also send a cease and desist letter via certified mail with return request to stop all communication with you. After this he can contact you only twice, which is to inform you that he would not call again and that he would press legal action.
A debt collector cannot harass you for payments nor can he threaten you in any way. Practices that are considered illegal include but are not limited to the following:
* Collecting additional fees or interest illegally
* Depositing or encashing a post dated check early
* Threatening to seize your property outside of the courts
* Contact you via postcard
The FDCPA prohibits collectors initiating wage garnishments on their own. If a court passes a judgment in favor of debt collectors to garnish your wages then they can initiate the action. Federal benefits like Social Security and SSI Benefits, veteran’s benefits, student aid and railroad retirement benefits are normally exempted from garnishment.
A debt is considered business debt when debt is taken to run your business. This kind of debt is treated separately and is not covered under the FDCPA. Hence before you consider yourself protected by the FDCPA, it would be better to comprehend the Act completely.
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Collection Practices Act offers protection from illegal and unethical tactics of the debt collectors. A clear understanding of debt collection laws under the FDCPA will entail you to the power to fight the third party debt collectors.