The Fair Debt Collection Practices Act

Question 1

What was the Fair Debt Collection Practices Act designed to prohibit?

Answer 1

The main purpose of the Fair Debt Collection Practices Act is to eliminate abusive and deceptive debt collection practices. It also serves to ensure that reputable debt collectors will not be competitively disadvantaged.

Question 2

List two circumstances in which a credit union’s employees become subject to the Act.

Answer 2

There are two circumstances in which these employees become subject to the act: 1) if your credit union regularly collects debts for other unrelated credit unions (or other creditors); and 2) if your credit union’s employees collect debts using a name other than that of the credit union.

Question 3

List two of the four basic provisions of the Fair Debt Collection Practices Act.

Answer 3

The four basic provisions of the Fair Debt Collection Practices Act are: 1) limit your communications with the member and others; 2) send a specific form of notice; 3) refrain from collection actions and practices that are considered deceptive or unfair; and 4) refrain from furnishing forms that are deceptive or misleading.

Question 4

Once you discover an attorney represents the member, what restrictions are placed on your collection efforts?

Answer 4

If you discover an attorney represents the member and you can easily obtain that attorney’s name and address, you can only communicate with that attorney unless the attorney fails to respond within a reasonable period of time.

Question 5

When is a debt collector required to provide a written notice called a “validation of debt”?

Answer 5

Generally, a debt collector must provide a member with a notice for validation of debt with the initial communication regarding debt collection, or within five days of that initial communication.

Question 6

Give two examples of what would be considered harassment under this Act.

Answer 6

Examples of harassment: 1) using or threatening to use violence; 2) using obscene, profane, or abusive language; 3) publishing a list of members who allegedly refuse to pay debts; 4) advertising a debt for sale to coerce payment; 4) allowing a telephone to ring repeatedly or continuously with the intent to annoy or harass the person; and 5) placing telephone calls without identifying yourself except as permitted to obtain location information.

Question 7

The Act prohibits the use of unfair practices to collect a debt. List the collection practices that are prohibited.