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Infringement of Fair Debt Collection Practices Act (FDCPA)

Any person to whom a debt is owed may try to collect the debt by contacting the debtor directly or by seizing and selling the debtor’s property to recover the debt. The creditor can also sue the debtor or employ the services of a debt collection agency to recover the debt. A creditor is any person who offers credit to a debtor or a lending company to whom a debt is owed. Any person or party assigned to recover a debt cannot be regarded as a creditor. Contrary, a debtor is a natural person whose responsibility is to settle a debt and the term is not applicable to any artificial person such as a corporation. In this context, a debtor is referred to as a consumer as the debt is incurred through the purchase of services. A debt is a consumer’s responsibility to pay money as a result of services purchased for family or personal use. It includes loan meant for purchase of goods and services meant for household purposes or for family use as well as loans for medical bills and education. However, it does not include funds owed without payment for goods and services such as fines, alimony and unpaid taxes. Funds used in maintaining the insurance on collateral is not a debt. Debt collector refers to a person or party who attempts to collect funds owed to another person. A creditor becomes a debt collector if he uses a name other than his in recovering a debt. Thus, such a creditor acts as a third party in the collection of debt. Employees of a debt collection agency as well as a firm that collects outstanding rents for owners of real estate are also referred to as debt collectors. The term is also applicable to a law firm that attempts to recover consumer debts owed to its clients by communicating with the debtor. Thus, a debt collector is a third party who collects or tries to collect funds due to another. Collection Agency A collection agency is a company employed by a creditor to recover an outstanding debt. Moreover, a collection agency may be a subsidiary or division of the lending company. A collection agency receives a part of the debt or funds it recovers from a debtor or it may buy the debt at a lower price from the creditor and keeps the entire owed funds that it recovers. However, it has no right to seize any asset of a debtor or to threaten a debtor to settle a debt unless it has defeated the in a lawsuit against the debtor. The use of unfair practices such as threats, abuses and harassments in the collection of debts led to the establishment of Fair Debt Collection Practices Act (FDCPA). Fair Debt Collection Practices Act (FDCPA): An Overview The Fair Debt Collection Practices Act (FDCPA) is a law which was established in 1978 to eradicate the abusive and unfair debt collection practices of debt collectors in an attempt to recover unpaid debts. The main objective of this act is to promote fair debt collection practices in the United States. However, the law does not apply to collection of personal debt in which case the creditor requests for a pay off directly from the debtor.   Guidelines For Debt Collectors The Act designed a set of rules to guide the conduct of the debt collectors. It requires the following practices while recovering a debt owed by a debtor.

  • Debt collectors should identify themselves both at the initial and subsequent communications with the consumer.
  • Collection agency should send on request by the consumer the name and address of the person that extended the credit. This is done within 30 days of the first notice sent to the consumer.
  • The consumer should be notified of his or her right to dispute the debt. A consumer writes to the debt collector to dispute a debt within 30 days of receiving the initial notice if the debt is not owed by the consumer, has been cleared or if a wrong amount is stated.
  • Evidence of verification of debt should be provided if a consumer requests for validation of the debt. The consumer should include a copy of any evidence concerning the debt in his written request for proof of the debt.
  • In a situation where a lawsuit is contemplated, it should be carried out only in the area where the contract was initially signed or where the consumer lives.
Unfair Debt Collection Practices The Fair Debt Collection Practices Act forbids the following abusive practices in attempt to recover funds owed by a consumer.
  • Contacting a debtor who has a legal representative. A collection agency should contact the consumer’s attorney in respect of any debt owed by the consumer.
  • Contacting the consumer through the telephone calls outside the stipulated period of 8:00 am to 9:00 pm local time.
  • Debt collectors should not harass the consumer with incessant calls even if the consumer refuses to answer the calls.
  • Including the consumer’s name in a “bad debt” list is forbidden.
  • Attempting to collect not owed by the consumer. Thus, a consumer has the right to challenge the validity of a debt.
  • Threatening to report false information on a consumer’s credit report or doing so in attempt to recover a debt. Such a practice by the collection agencies is unfair to the consumer.
  • Use of abusive language in communicating with the consumer. It is wrong for the debt collectors to use abusive words on the consumer whether written or through telephone calls.
  • Contacting the consumer bat the workplace even when informed that it is prohibited. Debt collectors are not supposed to call a consumer when at work.
  • Use of embarrassing media such as post cards or signs on envelope addressed to the consumer.
  • Communicating with third parties about the nature of the consumer’s debt. Debt collectors should not discuss the consumer’s debt with neighbors.
With strict adherence to FDCPA guidelines, invasion of personal privacy, marital instability, personal bankruptcy and loss of jobs resulting from unfair debt collection practices will be reduced.  

Don’t hesitate to contact your Attorney Los Angeles, Woodland Hills, Encino, Tarzana, Chatsworth and the entire San Fernando Valley, the Leventhal Law Group, P.C about violations against your privacy and take legal action or file a lawsuit to sue a debt collector that has broken the law. Call 818-347-5800 for a free consultation today!

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