What Are Fair Debt Collection Practices?

Interviewer: What other nuances do people not know about that would tell them they do or do not have a case? Are there restrictions like time of day or what is said on the call?

Andrew: In the debt collection context, we also have another law called the Fair Debt Collection Practices Act that prohibits debt collectors from engaging in certain behavior. Of course, if you can pay a debt, everyone should do so but if you cannot pay, the law should protect people from certain practices.

A collector can call you anytime between 8am and 9pm. If they call you outside that time frame, then they are violating the law. That does not happen very often. It is very rare.

If they use profanity, threaten arrest or threaten a garnishment, in many cases they are violating the law. But the easiest way to get a bad debt collector is when they call third parties to put pressure on the debtor. This is what separates a good debt collector from a bad debt collector.

A debt collector can only seek location information when they do not know the consumers place of residence and the consumers telephone number at that, or the do not know consumers place of employment. So if the debt collector knows either of those two pieces of information, it cannot seek location information. That is essentially the first test, is the debt collector doing this for a valid reason or is it just another way to embarrass the consumer and get them to pay up?

A lot of times, a collector will call the friends, family and relatives of a debtor and say they are seeking to confirm or correct location information. Naturally the person answering will say, “I don’t want to give out private information….who are you?” The collector can’t legally say who they are. So they say, “I am sorry, I can’t tell you that.”

Then the person is really suspicious and will usually not give any helpful information. At the end of the call the collector will then say, “Well, if you see so and so, can you tell her that we called? Here is our phone number.” The collector violates the law right then and there because they are attempting to use a third party to help collect the debt.

While they can call a third-party to seek location information, if they have a valid reason, they cannot use a third-party to help them collect a debt. That is the second test, did the collector attempt to use a third-party to collect a debt?

It has been my experience that when a debt collector is seeking location information they are really only trying to put social pressure on the consumer to pay up.

Interviewer: What if you owe a debt and they can’t find you. So they call you at work, for instance, or your mom and they say, “We are looking for Joe Blow.” The third party, your mom, work or whoever says, “Here is his number. Call him.”

Andrew: Well, if they know where you work, then they have location information and cannot call any third-parties to confirm or correct location information. They can call you at work though but if your employer prohibits such calls, then the consumer needs to tell the collector of that policy and tell the collector that it is inconvenient to receive calls at work. Once that is done, the debt collector is prohibited from calling you there.

It is usually best to put such requests in writing and send it via certified mail, return receipt to the collector. Do not send it to the payment address of the collector, try and find a billing inquiry address or correspondence address. Document the date that you informed the collector of this and keep good notes.

If the debt has been reduced to a judgment, meaning if the debtor was sued in court and the court granted a judgment against the debtor, then a debt collector can contact your employer.

If the collector has the legal right to seek location information and your mom or relative gives them your phone number of other contact information then, in those cases, your hypothetical is perfectly fine. There is nothing illegal about that. It is pretty much illegal where they do it to pressure you socially.

Interviewer: Just by the call, aren’t they pressuring you big time?

Andrew: Yes, but collectors and creditors do have rights. They have a right to attempt to collect a debt legally. I do not begrudge any collector or creditor who is just doing their job and doing it legally. Most of them do their job and most of them do it legally.

Congress intended to protect consumers from serious invasions of privacy as well as the loss of jobs while recognizing a debt collector’s legitimate need to seek prescribed information about the debtor consistent with statutory guidelines.

But there are bad actors out there. They do use social pressure to get you to pay. They can use it legally if they do it the right way.

Interviewer: What if they call a third party and the third party gives them your cell phone?

Andrew: That is a great question, now we have some inter-play between the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act. First, a third-party can do that but what the collector does with that information is the key.

If the collector calls the consumer using an auto-dialer, pre-recorded message or computer generated message then it is violating the TCPA because only the consumer can provide prior express consent to call their cell phone. A third-party cannot give permission to call someone else’s cell phone, legally speaking. If they did call the cell phone and they called it manually, that is perfectly legal.

Let me clarify that. I can give permission for somebody to call my cell phone. Also, my spouse can do that too and my lawyer can probably do that too. I think that would be the end of it as far as the rights there.