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Collection Laws from the Federal Trade Commission

Collection Laws from the Federal Trade Commission

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Published by: T on Apr 08, 2010
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Debt Collection FAQs: A Guide for Consumers
 you’re behind in paying your bills, or a credi-tor’s records mistakenly make it appear that youare, a debt collector may be contacting you.Te Federal rade Commission(FC), the nation’s consumerprotection agency, enorces the FairDebt Collection Practices Act(FDCPA), which prohibits debtcollectors rom using abusive, unair, ordeceptive practices to collect rom you.Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. Tisincludes collection agencies, lawyers who collectdebts on a regular basis, and companies that buy delinquent debts and then try to collect them.Here are some questions and answers aboutyour rights under the Act.
 What types o debts are covered?
Te Act covers personal, amily, and householddebts, including money you owe on a personalcredit card account, an auto loan, a medical bill,and your mortgage. Te FDCPA doesn’t coverdebts you incurred to run a business.
February 2009
Can a debt collector contact me any time orany place?
No. A debt collector may not contact you at incon-venient times or places, such as beore 8 in themorning or ater 9 at night, unless you agreeto it. And collectors may not contact you at work i they’re told (orally or in writing)that you’re not allowed to get calls there.
How can I stop a debt collector romcontacting me?
I a collector contacts you about a debt, you may  want to talk to them at least once to see i you canresolve the matter – even i you don’t think you owethe debt, can’t repay it immediately, or think thatthe collector is contacting you by mistake. I youdecide ater contacting the debt collector that youdont want the collector to contact you again, tellthe collector – in writing – to stop contacting you.Here’s how to do that:Make a copy o your letter. Send the originalby certied mail, and pay or a “return receipt” soyou’ll be able to document what the collector re-ceived. Once the collector receives your letter, they may not contact you again, with two exceptions: acollector can contact you to tell you there will be no
urther contact or to let you know that they or thecreditor intend to take a specic action, like linga lawsuit. Sending such a letter to a debt collectoryou owe money to does not get rid o the debt,but it should stop the contact. Te creditor or thedebt collector still can sue you to collect the debt.
Can a debt collector contact anyone elseabout my debt?
I an attorney is representing you about the debt,the debt collector must contact the attorney, ratherthan you. I you don’t have an attorney, a collec-tor may contact other people – but only to ndout your address, your home phone number, and where you work. Collectors usually are prohibitedrom contacting third partiesmore than once. Other than toobtain this location inormationabout you, a debt collectorgenerally is not permitted todiscuss your debt with anyoneother than you, your spouse, oryour attorney.
 What does the debt collector have to tell meabout the debt?
Every collector must send you a written “valida-tion notice” telling you how much money youowe within ve days ater they rst contact you.Tis notice also must include the name o thecreditor to whom you owe the money, and how toproceed i you don’t think you owe the money.
Can a debt collector keep contacting mei I don’t think I owe any money?
I you send the debt collector a letter stating thatyou don’t owe any or all o the money, or askingor verication o the debt, that collector muststop contacting you. You have to send that letter within 30 days ater you receive the validationnotice. But a collector can begin contacting youagain i it sends you written verication o thedebt, like a copy o a bill or the amount you owe.
 What practices are o limits or debt collectors?Harassment.
 Debt collectors may not harass,oppress, or abuse you or any third parties they contact. For example, they may not:
pay their debts (but they can give this inor-mation to the credit reporting
to annoy someone.
False statements.
Debt col-lectors may not lie whenthey are trying to collect a debt. For example,they may not:
legal orms i they are.
Debt collectors may not harass, oppress, or abuse you or any third  parties they contact.
2 FTC Facts
For Consumers
Debt collectors also are prohibited romsaying that:
-erty or wages unless they are permitted by law 
so would be illegal or i they don’t intend totake the action.
Debt collectors may not:
-mation about you toanyone, including acredit reporting
looks like an ocial document rom a court
Unair practices.
Debt collectors may not engagein unair practices when they try to collect a debt.For example, they may not:
on top o the amount you owe unless thecontract that created your debt – or your state
Can I control which debts my paymentsapply to?
 Yes. I a debt collector is trying to collect morethan one debt rom you, the collector must ap-ply any payment you make to the debt you select.Equally important, a debt collector may not apply a payment to a debt you don’t think you owe.
Can a debt collector garnish my bank account or my wages?
I you don’t pay a debt, a creditor or its debt col-lector generally can sue you to collect. I they win,the court will enter a judgment against you. Te judgment states the amount o money you owe,and allows the creditor orcollector to get a garnish-ment order against you,directing a third party,like your bank, to turnover unds rom youraccount to pay the debt. Wage garnishment happens when your employ-er withholds part o your compensation to pay yourdebts. Your wages usually can be garnished only asthe result o a court order. Don’t ignore a lawsuitsummons. I you do, you lose the opportunity toght a wage garnishment.
Can ederal benefts be garnished?
Many ederal benets are exempt rom garnish-ment, including:
 Disability Benets
•ServiceMembers’Pay •MilitaryAnnuitiesandSurvivors’Benets•StudentAssistance•RailroadRetirementBenets
Can a debt collector garnish my bank account or my wages? 
FTC Facts
For Consumers

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