Fallen behind on debts? It happens sometimes, and when it does, you might find yourself being bombarded with calls and letters from debt collectors.
Legally, creditors can attempt to collect what's owed to them. But they do have to follow some rules. That's where the Fair Debt Collection Practices Act (FDCPA) comes in.
The FDCPA protects you against harassment and unfair debt collection practices. If you're being contacted by debt collectors, it's important to know your rights.
The Fair Debt Collection Practices Act is a federal regulation that governs debt collectors. Specifically, the FDCPA outlines what debt collectors can and can't do when attempting to collect certain types of debt.
In a nutshell, the Act is designed to protect consumers from abusive, unfair, or deceptive practices. It applies to a range of different entities, including:
The FDCPA, along with the Fair Credit Reporting Act (FCRA) and the Fair Credit Billing Act (FCBA) is meant to protect your interests as a consumer.
The main reason the FDCPA exists is to enforce limits on what debt collectors can and can't do. Without laws in place, debt collectors would have free reign to use deceptive or unfair tactics to get consumers to pay debts.
The FDCPA outlines rules for when and how debt collectors can pursue debts. Here's a rundown of what is and isn't allowed.
Debt collectors can't continue contacting you if you formally request that they stop calling or writing to you about a debt. They also can't offer misleading information to try to trick you into paying.
For example, a debt collector can't tell you they're going to sue you to get you to pay unless they actually plan to do so. They also can't impose unfair fees or fines in connection with an unpaid debt.
The FDCPA applies to specific types of debt, including:
If you owe any of those and fall behind on payments, debt collectors have the right to contact you about the balance.
The FDCPA doesn't cover all debts. Specifically, it doesn’t cover:
If you take out a $100,000 loan to start a small business but the business fails, for example, you wouldn't be able to use the FDCPA as a shield against debt collection. The same is true if your original creditor is trying to collect, versus selling the debt to a third-party debt buyer.
There are certain things debt collectors can't do under the FDCPA. Debt collectors may be guilty of FDCPA violations for any of the following:
If you think a debt collector has violated your rights under the FDCPA, you have the right to fight back. Specifically, you're allowed to sue the debt collector for damages.
Under FDCPA rules, debt collectors can be held liable for:
The only way for a debt collector to escape liability is to show that any violation was not intentional, was a bona fide error or that they acted on an advisory opinion of the Federal Trade Commission (FTC) in good faith Otherwise, the court could order them to pay you for the violation.
Pro tip: document your communications with debt collectors.
If you're being contacted by debt collectors, it's important to keep a paper trail of your communications. You could do that by contacting them by letter or email versus chatting over the phone. If you do talk to a debt collector on the phone, make a note of the date, the person's name and the details of the conversation.
And if you're being harassed or think your rights have been violated be sure to document that too. Having supporting documents can help bolster your case if you need to sue a debt collector for an FDCPA violation.
You could avoid dealing with debt collectors by staying in contact with your creditors.
For example, say you get laid off from work and you don't have the money to make your credit card payment. You could call the credit card company to ask if it offers a hardship program. Some of the benefits of these programs are:
If that's not an option, or if you've already fallen behind, you might look into credit card debt relief instead. Debt relief refers to different solutions for managing credit cards and can include:
Any of these options could put a stop to debt collection calls, but they don't all work the same way.
Debt consolidation, either through a loan or 0% APR balance transfer, could help you to pay off debts faster while saving money on interest. A debt management plan wouldn't necessarily reduce what you owe but it could streamline monthly payments.
Negotiating debts with the help of a debt settlement company could allow you to pay off debts for less than what's owed. Bankruptcy is often seen as a last resort option for dealing with unpaid debt.
Talking to a credit counselor or debt specialist can help you decide what path might be right for you if you're dealing with debt collectors.
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during August 2024. The data uncovers various trends and statistics about people seeking debt help.
Ever wondered how many credit card accounts people have before seeking debt relief?
In August 2024, people seeking debt relief had some interesting trends in their credit card tradelines:
Having many credit card accounts can complicate financial management. Especially when balances are high. If you’re feeling overwhelmed by the number of credit cards and the debt on them, know that you’re not alone. Seeking help can simplify your finances and put you on the path to recovery.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) (using 2022 data) the average home-secured debt for those with a balance was $212,498. The percentage of families with mortgage debt was 42%.
In August 2024, 27% of the debt relief seekers had a mortgage. The average mortgage debt was $236,240, and the average monthly payment was $1,890.
Here is a quick look at the top five states by average mortgage balance.
| State | % with a mortgage balance | Average mortgage balance | Average monthly payment |
|---|---|---|---|
| California | 21 | $391,801 | $2,725 |
| Washington DC | 18 | $336,914 | $2,290 |
| Utah | 35 | $324,405 | $2,184 |
| Nevada | 26 | $307,368 | $2,063 |
| Massachusetts | 29 | $303,507 | $2,366 |
The statistics are based on all debt relief seekers with a mortgage loan balance over $0.
Housing is an important part of a household's expenses. Remember to consider all your debts when looking for a way to get debt relief.
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
Frequently Asked QuestionsThe FDCPA allows consumers to dispute the validity of debts with a debt collector. To dispute a debt, you must request validation from the debt collector in writing. Once you dispute a debt, the debt collector must halt collection actions until they're able to provide you with written verification that the debt belongs to you.
One of the most common FDCPA violations is continuing to try to collect debts that are no longer owed. Other common violations include harassment, making threats, excessive phone calls, and using false information to try to collect a debt.
The Fair Credit Reporting Act is designed to ensure fairness in credit reporting. Under the FCRA, you have the right to dispute inaccurate or erroneous information in your credit reports. The FDCPA deals with debt collections and what debt collectors are allowed to do when contacting consumers.
If you think your rights have been violated under the FDCPA, you can contact the debt collector and ask it to stop, or you can sue it in court. You can also submit a complaint online with the Consumer Financial Protection Bureau, or contact your state’s attorney general.
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