Basics of the Fair Debt Collections Practices Act

Fair Debt Collections Practices Act pic

Fair Debt Collections Practices Act
Image: ftc.gov

Founded in 2003, Asset Recovery Associates, Inc., is a debt consolidation firm based in Lombard, Illinois. To best serve people who are in debt, Asset Recovery Associates has guidelines to help resolve debts while considering each person’s financial situation, including client-customized calling campaigns and billing strategies, which are governed by the Fair Debt Collections Practices Act (FDCPA).

Most recently amended in 1996, the Fair Debt Collections Practices Act was originally enacted in 1978 to curtail abusive debt collection actions against individuals and their families. There is a wide range of illegal practices under the FDCPA, most of which fall into three areas: communications, practices, and representations. Communication restrictions include what time of day a collection agency can contact a consumer and whether or not it can contact the consumer at work, among others. Practice restrictions prevent the collection agency from going to unreasonable lengths to collect, including threatening a consumer with criminal prosecution or adding fees or interest not approved by state law or the original agreement. Finally, a collection agency cannot engage in false representation by claiming to be a different organization or misrepresenting the amount the consumer owes.

If a consumer feels that a collector has not followed the Fair Debt Collections Practices Act, there are a number of actions he or she can take to address a potential violation. From suing the collector in state or small claims court to reporting the violation to a government agency or their state attorney general, the collector may be required to pay a settlement as a result, or such action may effect debt settlement negotiations. Although the FDCPA only applies to third party collectors hired by the debt’s original creditor, some states may include the original creditor in their more expansive protection laws.

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