Fair Debt Collection Practices Act Flashcards
What types of debt collection does the FDCPA apply to?
The FDCPA applies only to the collection of debt incurred by a consumer primarily for personal, family or household purposes. It does not apply to the collection of corporate debt or to debt for business or agricultural purposes.
What is a debt collector?
Under FDCPA, a “debt collector” is defined as any person who regularly collects, or attempts to collect, consumer debts for another person or institution or uses some name other than its own when collecting its own consumer debts. That definition would include, for example, an institution that regularly collects debts for an unrelated institution. This includes reciprocal service arrangements where one institution solicits the help of another in collecting a defaulted debt from a customer who has moved.
An institution is not a debt collector under FDCPA when it collects what types of debts? (7)
or if they are? (2)
• Another’s debts in isolated instances.
• Its own debts under its own name.
• Debts it originated and then sold but continues to service (for example, mortgage and student loans).
• Debts that were not in default when they were obtained.
• Debts that were obtained as security for a commercial credit transaction (for example, accounts receivable financing).
• Debts incidental to a bona fide fiduciary relationship or escrow arrangement (for example, a debt held in the
institution’s trust department or mortgage loan escrow for taxes and insurance).
• Debts regularly for other institutions to which it is related by common ownership or corporate control.
- Officers or employees of an institution who collect debts owed to the institution in the institution’s name.
- Legal process servers.
What is a consumer?
For communications with a consumer or third party connected with the collection of a debt, the term “consumer” is defined to include the borrower’s spouse, parent (if the borrower is a minor), guardian, executor, or administrator.
What are the requirements regarding communicating with the consumer? (3)
- Cannot communicate with a consumer at any unusual times (before 8am or after 9pm) or in an inconvenient place, unless there is a court order permitting.
- cannot contact consumer at place of employment if collector believes such communications are prohibited.
- if collector knows the consumer has retained an attorney, and can ascertain the attorney’s contact info, all contacts must be with that attorney.
In what circumstance must a debt collector cease communicating with a consumer?
exceptions? (2)
When a consumer refuses, in writing, to pay a debt or requests that the debt collector cease further communication, the collector must cease all further communication, except to advise the consumer that:
- The collection effort is being stopped.
- Certain specified remedies ordinarily invoked may be pursued or, if appropriate, that a specific remedy will be pursued.
What third parties are collectors permitted to contact when trying to collect debt? (6)
What are they permitted to request from these third parties? (3)
- The consumer.
- The consumer’s attorney.
- A consumer reporting agency (if permitted by local law).
- The creditor.
- The creditor’s attorney.
- The debt collector’s attorney.
They are permitted to request location information including:
- home address
- telephone
- place of employment
What information must a debt collector provide when contacting a third party?
anything they cannot say or do?
The debt collector must give his or her name and state that he or she is confirming or correcting location information about the consumer.
Unless specifically asked, the debt collector may not name the collection firm or agency or reveal that the consumer owes any debt.
No third party may be contacted more than once unless the collector believes that the information from the first contact was wrong or incomplete and that the third party has since received better information, or unless the third party specifically requests additional contact.
What is a collector required to provide to a consumer to validate the debt? (5)
If this information was not in the initial communication and if the consumer has not paid the debt five days after the initial communication, the following information must be sent to the consumer in written form:
• The amount of the debt;
• The name of the creditor to whom the debt is owed;
• Notice that the consumer has 30 days to dispute the debt before it is assumed to be valid;
• Notice that upon such written dispute, the debt collector will send the consumer a verification of the debt or a copy of any judgment; and
• Notice that if, within the 30-day period, the consumer makes a written request for the name and address of the original creditor, if it is different from the current creditor, the debt collector will provide that information.
What types of practices are prohibited by debt collectors? (3)
- Harassing or abusive practices
- false or misleading representations
- Unfair or unconscionable means to collect debt.
What are some examples of harassing or abusive practices that are prohibited? (6)
- Use or threaten to use violence or other criminal means to harm the physical person, reputation, or property of any person.
- Use obscene, profane, or other language which abuses the hearer or reader.
- Publish a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of sections 603(f) or 604(3) of the Act.
- Advertise a debt for sale to coerce payment.
- Annoy, abuse, or harass persons by calling repeatedly their telephone number or allowing their telephones to ring continually.
- Make telephone calls without properly identifying oneself, except as allowed to obtain location information.
What are some examples of false or misleading representations by a debt collector?
- Falsely represent or imply that he or she is vouched for, bonded by, or affiliated with the United States or any state, including the use of any badge, uniform, or similar identification.
- Falsely represent the character, amount, or legal status of the debt, or of any services rendered, or compensation he or she may receive for collecting the debt.
- Falsely represent or imply that he or she is an attorney or that communications are from an attorney.
- Threaten to take any action which is not legal or intended.
- Falsely represent or imply that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment or sale of any property or wages of any person, unless such action is lawful and intended by the debt collector or creditor.
- Falsely represent or imply that the sale, referral, or other transfer of the debt will cause the consumer to lose a claim or a defense to payment, or become subject to any practice prohibited by the FDCPA.
- Falsely represent or imply that the consumer committed a crime or other conduct to disgrace the consumer.
- Communicate, or threaten to communicate, false credit information or information which should be known to be false, including not identifying disputed debts as such.
- Use or distribute written communications made to look like or falsely represented to be documents authorized, issued, or approved by any court, official, or agency of the United States or any state if it would give a false impression of its source, authorization, or approval.
- Use any false representation or deceptive means to collect or attempt to collect a debt or to obtain information about a consumer.
- Fail to disclose in the initial written communication with the consumer, and the initial oral communication if it precedes the initial written communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose. In addition, the debt collector must disclose in subsequent communications that the communication is from a debt collector. (These disclosures do not apply to a formal pleading made in connection with a legal action.)
- Falsely represent or imply that accounts have been sold to innocent purchasers.
- Falsely represent or imply that documents are legal process.
- Use any name other than the true name of the debt collector’s business, company, or organization.
- Falsely represent or imply that documents are not legal process or do not require action by the consumer.
- Falsely represent or imply that he or she operates or is employed by a consumer reporting agency.
What are some examples of unfair practices from a debt collector?
• Collect any interest, fee, charge or expense incidental to the principal obligation unless it was authorized by the original debt agreement or is otherwise permitted by law.
• Accept a check or other instrument postdated by more than five days, unless he or she notifies the consumer, in writing, of any intention to deposit the check or instrument. That notice must be made not more than ten or less than three business days before the date of deposit.
• Solicit a postdated check or other postdated payment instrument to use as a threat or to institute criminal
prosecution.
• Deposit or threaten to deposit a postdated check or other postdated payment instrument before the date on the check or instrument.
• Cause communication charges, such as those for collect telephone calls and telegrams, to be made to any person by concealing the true purpose of the communication.
• Take or threaten to repossess or disable property when the creditor has no enforceable right to the property or does not intend to do so, or if, under law, the property cannot be taken, repossessed or disabled.
• Use a postcard to contact a consumer about a debt.
How should a collector apply payments for a consumer who owes several debts being collected by the same collector?
Payments must be applied according to the consumer’s instructions. No payment may be applied to a disputed debt.
What legal actions can be taken by debt collectors?
A debt collector may file a lawsuit to enforce a security interest in real property only in the judicial district in which the real property is located. Other legal actions may be brought only in the judicial district in which the consumer lives or in which the original contract creating the debt was signed.
