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Debt Collectors and the Fair Debt Collection Practices Act (FDCPA)

Even if you are in debt, you have a right to fair treatment from those who are seeking to recover money from you. You don`t have to put up with aggressive, harassing or threatening treatment from debt collectors.

The Federal Trade Commission (FTC) is the national consumer protection agency which will uphold the rights you have under the Fair Debt Collection Practices Act (FDCPA). This Act exists to protect consumers and you might be surprised how many rights you have because of it. Make sure you know and understand what rights you have as a consumer under the FDCPA and what steps you can take to minimize the impact that being in debt is having on you and your family.

It`s important to understand that the Act doesn't`t cover any debts you may have in connection with running a business, but it does cover personal, family and household debts such as credit cards, automobile loans, medical bills and mortgages.

First of all, many debt collectors aren't too fussy about contacting you whenever they feel like it. But under the FDCPA they should only contact you at reasonable times, such as between 8am and 9pm, unless you've said otherwise. And if you tell them you don`t want them contacting you at work, they must not do so.

Once you have been contacted by a debt collector, you have the right to tell them, in writing, not to contact you again. You will still, of course, owe the money, but such an action should prevent further contact. There are two situations when they may legally contact you again.

Firstly, to inform you that there will be no further contact and secondly to let you know that they or the creditor intends to take a specific action, such as filing a lawsuit against you.

If you`re contacted by a debt collector and you don`t think you actually owe any money, you should send them a letter stating this. You may want to ask for verification of the debt and/or ask them to stop contacting you. Make sure you do this within 30 days of receiving the validation notice. However, if they are able to produce evidence of the debt, they may contact you again.

Some unscrupulous collectors will resort to tactics that are intimidating, misleading and abusive. Any such actions are against the law and you are protected by the FDCPA.

For example, they may not threaten you with violence, use obscene or profane language or phone you repeatedly.

They cannot claim to be someone they`re not, such as an attorney or government representative.

Nor can they falsely claim you have committed a crime or misrepresent how much you owe.

Debt collectors are breaking the law if they say you will be arrested for not paying, or that they will seize, garnish, attach or sell your property or wages (except when they have legal permission to do so and intend to do so).

Furthermore, they cannot try to collect any interest fee, or make any other type of charge on top of what you actually owe, unless the contract under which you created the debt allows for this, or it is permitted by your state law.

Although these are all consumer rights, fully set out in the FDCPA, nevertheless certain unscrupulous collectors will try to ignore them, or get round them. But you have clear recourse in law to sue a collector when you think they have violated the Act, in a state or federal court, provided you do this within one year from the date of the violation. If you win, you could be awarded damages if you can prove you have suffered as a result of the illegal collection practices. And you can be reimbursed for the legal and court costs.

If you`re having problems with a debt collector and think they may have violated the law, you should contact your state Attorney General`s office and the Federal Trade Commission. Many individual states have laws which differ from the FDCPA, so you need to check out exactly where you stand. For a ready reference of state laws, statutes of limitations, sample letters and in-depth instructions, get your own copy of Rich's Step-by-step Guide for Dealing with Unfair and Illegal Debt Collection Tactics here.

But you must remember, that even in cases where it`s proven that debt collectors have violated the law, the fact remains that if the debt is genuine, you still owe the money and will have to pay it back. Remember, the Fair Debt Collection Practices Act protects your rights as a consumer for debts related to personal loans, household and credit card debt, auto loans and Mortgage debt.