Collection Agency Laws Offers Consumers Protection
The American dream means something different to every individual, but there is one thing in common with almost every American dream. Nearly half of the population in the United States has fallen into debt in pursuit of their American dream and as a result must suffer the constant inquiries of collection agencies. The federal government of the United States has enacted laws to help protect its citizens from the unfair practices of collection agencies, and each state in the U.S. has taken extra steps to provide citizens with protection. Knowing about these collection agency laws can help keep collection agencies off your back.
Collection agency laws were first developed and approved in 1978. The U.S. Congress enacted the Fair Debt Collection Act in 1978 in response to the unfair practices of collection agencies. The law is designed to protect those in debt from abusive, harassing, and unfair collection agency practices. The reasoning behind the federal government’s enactment of this law included the following points:
- Abundant evidence existed of abusive, deceptive, and unfair debt collection practices by collection agencies
- Existing collection agency laws and procedures were inadequate to protect consumers
- Other means of effective debt collection were available without misrepresentation and abusive practices
In addition to the federal collection agency law, each state in the U.S. has their own additional collection agency laws that govern the process and limit what debt collectors can and cannot do. The best way to work the situation in your favor is to do the research necessary to learn the collection agency laws that govern the process in your state and the state the debt collector resides in.
If you owe money to a creditor and they turn your case over to a debt collection agency, don’t allow yourself to be steamrolled by the collection agency employees. Many companies keep an in-house collection department within their business, but many others opt to work with third-party debt collection agencies. Generally speaking these are the collection agencies that most individuals experience issues with, so learning how to deal with these individuals will help individuals the most.
Learning the collection agency laws is the best way to prevent harassing and abusive practices. The two most-used practices for debt collectors are mailed letters and phone calls. When these letters and calls start flowing in, remember the following information and you’ll be better armed to deal with the process:
- First and foremost, collection agencies may not harass you or your family members and friends. One call a day is not harassment, but several phone calls in one day is crossing the line.
- Collection agencies are not allowed to call on Holidays.
- Agencies may only call between 1pm and 5pm on Sundays.
- Agencies may not call before 7am or after 9pm Monday through Saturday.
- Debt collectors may not call your friends, family, or employer to gather information beyond your address and phone number
In addition to collection agency laws that govern contact and harassment, there are other important factors for debtors to keep in mind. Under federal and state collection agency laws, creditors are not allowed to do any of the following:
- Creditors cannot legally seize your assets, bank accounts, or paycheck without winning a favorable judgment in a lawsuit.
- They cannot legally make public announcements or disclosures concerning your debt.
- They cannot legally get you fired from your job.
- They cannot legally engage in any type of physical violence or threats.
Knowing all of the protection offered by collection agency laws will help anyone facing debt collection successfully navigate what can otherwise be an intimidating and even scary process. It is important to take the process seriously though. Debt collectors do have legal options at their disposal as well. Remember, it is legal for debtors to report your debts to the credit bureaus, damaging your credit rating; and it is also legal for them to file a lawsuit to recover the debt.