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Debt Collection Laws and Consumer Protection
Dealing with debt collection services can be a scary process, especially if you aren’t sure where your jurisdiction lies. If you find yourself in contact with collectors, it’s a good idea to familiarize yourself with your individual rights so you won’t be taken advantage of. These laws are in place to ensure your personal privacy isn’t at risk and can be reported if they’re abused by any collection service handling your debt.
Collectors are any agencies, attorneys or companiesacting on behalf of a creditorto encourage you to repay an outstanding balance associated with an account. In some cases it may be the creditors internal collection department.
Types of Debt Covered by Collectors
Personal, family and household loans are included on the list of debts that can be represented by a collection service. Business accounts are exempt from the list, but the following are included:
- Personal credit cards
- School loans
- Medical bills
Debt collection services cannot:
- Use harassing tactics including oppression and profane or obscene language
- Threaten violence or harm to a consumer
- Contact you by postcard
- Publish a list of names including people who refuse to pay their debt
- Forget to send written notice of information pertaining to the debt within five days of contacting you about your balance
- Repeatedly use phone calls in an effort to annoy a consumer
- Try to make contact with a consumer before the hours of 8 AM or after 9 PM
- Contact you at work if you have requested otherwise verbally or in writing
- Falsify information, including who they are, the amount of debt owed or that they are a government affiliated service
- Contact others regarding your debt unless it is your attorney or they are gathering information that pertains to your address, home phone or place of employment
- Claim that you will be arrested if your debts are not payed
- Deposited a check before the postdated time
- Apply payment to a debt that hasn’t been selected by you
The Federal Trade Commission (FTC) enforces the Fair Debt Collection Practices Act (FDCA). If any of the laws regulated by the FDCA are neglected, you can report the debt collection company to your state’s Attorney General, the Consumer Financial Protection Bureau or the FTC.
Debt services can:
- Contact you after written notice has been received to stop communication only if they are letting you know that they will no longer contact you, or they are informing you that legal action is being taken
- Contact others about your debt as long as it’s an appointed attorney or they’re inquiring only about your address, home phone or place of employment
- Take you to court after multiple notices of unsettled debt
- Sue you in order to collect owed debt
- Garnish bank and work wages in order to obtain the money owed if they win a court case on the matter
Federal Benefits Exempt from Garnishment
Unique situations allow certain benefits to be taken away in order to repay debts like student loans, child support and unpaid delinquent taxes. Collectors are exempt from obtaining the following benefits for any other type of debts.
- Supplemental Security Income (SSI) Benefits
- Federal Emergency Management Agency Federal Disaster Assistance
- Social Security Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Military Annuities and Survivors’ Benefits
- Veterans’ Benefits
Remember to always keep track of any documents regarding interactions with debt collection services. Proof of correspondence will help you in the occurrence of a legal dispute. Be sure to request written notice of any changes in your debt and send all replies and requests by registered mail. For more information on debt collection, visit our page here.