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Fair Debt Collection & Fair Credit Reporting

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Fair Debt Collection Act

Evidence was presented to the US House of Representatives and the Senate that creditors were using unfair practices to coerce debtors into paying their debts. Many of these unfair practices placed a strain on marriages and families, led to the loss of jobs, invaded privacy, and contributed to the increase in personal bankruptcies.

Our federal lawmakers felt that abusive collection practices were unnecessary, so they passed a law that clearly stated the dos and don’ts of collection. This law is known as the Fair Debt Collection Practices Act. Individual states may have similar laws that may be more restrictive in some areas than federal laws. You may want to check your local library for a copy of your state statute dealing with collection practices.

Under the Fair Debt Collection Practices Act, you, as the debtor, have many rights. As with many things, if you do not know your rights, you may be mistreated and think you have to sit back and take it. NO MORE! According to the Fair Debt Collection Practices Act, some of your rights are as follows.

What Creditors Can’t Do

You cannot be contacted at a time or place known to be inconvenient to you. Unless a creditor knows your schedule, it is assumed that a convenient time is between 8:00 a.m. and 9:00 p.m.
You cannot be contacted at your place of employment if the creditor knows or has reason to know that your employer prohibits such calls.
Your creditor cannot disclose details about your debt to anyone other than a spouse, parent (if the debtor is a minor), guardian, executor, or administrator.
Creditors cannot use the threat of violence or other criminal means to harm you, your property, or your reputation.
Creditors are not to use profane or obscene language or language which is abusive to you.
Creditors cannot phone repeatedly or continuously with the intent to annoy, abuse, or harass the person at that number.
Creditors can, if trying to locate you, make contact with others only to acquire your whereabouts. They are not to reveal that you owe a debt or disclose their business name unless expressly requested to do so. They should only make contact with this person one time.
Creditors cannot threaten to take legal action that cannot be legally taken or that is not intended to be taken. In Wisconsin, a creditor cannot threaten to garnish wages or take your property unless the creditor already has a judgment against you, and only if Wisconsin law allows them to do that.
Creditors may not use false representation or deceptive means to collect a debt or obtain information about you.
If you have hired an attorney regarding your debt, the creditor, upon notification of this information, must not communicate with anyone other than the attorney.
If you notify the creditor in writing that you refuse to pay the debt or wish the debt collector to stop all further communication with you, the debt collector must stop communication. The exception is that the debt collector can notify you of further collection remedies they intend to take (this is true only if the creditor is a third party and not the original creditor). It is a good idea to send this written notification by certified mail with the return receipt requested. Keep a copy of the letter you mail to the creditor. Attach the return receipt indicating by date and signature that the creditor receives your letter.
A debt collector cannot accept a postdated check that is postdated for more than five days unless you are notified in the following ways: they must notify you in writing of the day they intend to cash the check, and they must make that notification between three and ten days before they cash the check.
Debt collectors cannot threaten to harm you or hurt your reputation. For example, a debt collector cannot threaten to publish your name in the paper as a debtor.
Debt collectors cannot force you to accept collect phone calls.

What Debt Collectors Must Tell You

You have the right to know what account the debt collector is collecting on.
During the initial contact with you, the debt collector must tell you for whom they are collecting the debt.
The debt collector must tell you that you have the right to disagree if you believe you do not owe the debt. If you dispute the debt, the debt collector must investigate the matter. The collection agency cannot continue collection efforts until it proves that the debt belongs to you.
You should receive a letter stating that a third party is now collecting the debt. You have 30 days from the date of that letter to dispute the debt. If the first communication with you is by phone, the debt collector must send you a letter explaining your rights within five days of that phone call.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of every “consumer reporting agency” (CRA). Most CRAs are credit bureaus that gather and sell information about you (such as if you pay your bills on time or have filed for bankruptcy) to creditors, employers, landlords, and other businesses. The FCRA gives you specific rights. You can find the complete text of the FCRA 15 USC 1681.1681u at the Federal Trade Commission’s website (www.ftc.gov).

Summary of Your Rights

You must be told if information in your file is being used against you. This is true whether you have applied for credit, insurance, or employment. You must be provided with the name, address, and phone number of the CRA that provided the consumer report.
You can dispute inaccurate information with the CRA. The CRA must investigate your claim and report back to you within 30 days. If the CRA’s investigation does not resolve your dispute, you may add a brief statement to your file.
Incorrect information must be corrected or deleted. The CRA must remove or correct the information within 30 days of the dispute. Accurate information, however, does not have to be deleted unless it is outdated or cannot be verified.
You can dispute the incorrect information with the source who is reporting it. The source cannot report to a CRA unless they also include your dispute.
Outdated information may not be reported. Negative information more than seven years old, or ten years for bankruptcy, may not be reported by the CRAs.
Not just anyone can view your file. CRAs may provide information only to people with a need considered acceptable by the FCRA. Generally, this means credit and insurance grantors, employers, landlords, or other businesses that have proven a need. The general public does not have access to your information.
Your consent is required for reports that are provided to employers or that may contain medical information.
You can choose to opt-out from lists that the CRAs may provide that result in unsolicited credit or insurance offers.
You may seek damages from violators. If a CRA or the provider of information to the CRA violates the FCRA, you may sue them in a state or federal court.