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Fair debt collection practices act (FDCPA) was enacted to identify and eliminate abusive practices in debt collection, provide a medium for disputing errors and obtain validation of debt information to ensure accuracy of information.

Debt collectors have to follow rules laid down in the debt collection act otherwise stiff penalties may follow.

Who all are covered by the debt collection act?
Debt collectors have been using different names such as factoring company, collection agency, to claim immunity from the debt collection act. Luckily the FDCPA defines a debt collector in a broad sense as a person who makes use of commerce in any business, where the principal purpose is debt collection. It is applicable to debts that are owed or due or the debts that are about to be due.

Is business debt regulated by FDCPA?
The debt is limited to personal and non-transactional use only. So the debts owed by businesses are not regulated by the debt collection act.

The debt collection act was enacted to avoid deceptive and abusive practices in debt collection. Described below are more specifics mentioned in the debt collection act:

Prohibited conduct:

Contact consumer where they work/are employed:
If a consumer has either verbally or in writing informed the debt collection agency not to contact at their work place, then it would be a violation of the act to do so.

Hours of contact:
Debt collectors have been specifically informed to contact consumers between 8AM and 9PM local time.

Threatening to report incorrect information:
Making an attempt to report incorrect information or threatening to report incorrect information on the consumer credit file at the credit bureau is prohibited under FDCPA.

Misrepresentation:
Using deception to collect debt from consumer or misrepresentation that the debt collector is a law enforcement officer or attorney is prohibited under FDCPA.

Threatening legal action:
To threaten a legal action or arrest which the debt collector does not contemplate doing is against the debt collection act.

Abusive language:
A debt collector cannot use abusive language in the course of communication.

Contacting third party:
The FDCPA act prohibits the debt collector from discussing the matter with third parties. However, the debt collector can discuss the issues with the consumer's spouse or attorney.

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