Debt Collectors 2: Laws and Regulations You Need to Know

Debt collectors have to follow strict laws and regulations to ensure they don't overstep their boundaries. The Fair Debt Collection Practices Act (FDCPA) is a federal law that governs debt collectors' behavior.

Debt collectors are not allowed to contact you at work if they know you're not allowed to receive calls there. They also can't contact you if you've asked them to stop.

The FDCPA requires debt collectors to provide a written notice within five days of their initial contact, stating the amount of debt, the creditor's name, and a statement that unless you dispute the debt within 30 days, it will be assumed to be valid. This notice must be sent to your last known address.

Explore further: Are Debt Collectors Allowed to Call on Sunday

Scott Adkins & Louis Mandylor in 'Debt Collectors' are the stars of the show. They're joined by Vladimir Kulich and more in this action-packed film.

The movie follows French and Sue, two debt collectors with a mission to collect on three debts within two days. They'll use any force necessary, but must evade a crime lord out for revenge.

Scott Adkins brings his signature action skills to the role, and Louis Mandylor adds a touch of humor to the mix. The chemistry between them is undeniable, making their characters feel like old friends.

Debt Collectors (The Debt Collector 2) is currently streaming on Netflix, so you can catch it at your convenience.

The Bureau has the authority to exempt certain debt collection practices from federal requirements if a state has similar regulations and effective enforcement mechanisms in place.

In order to qualify for an exemption, a state's debt collection laws must be substantially similar to federal regulations, ensuring a comparable level of protection for consumers.

Intriguing read: Collection Tips for Debt Collectors

Abusive debt collection practices are a significant problem in the US, contributing to personal bankruptcies, marital instability, job loss, and invasions of individual privacy.

Existing laws and procedures for dealing with these issues are inadequate to protect consumers.

There are alternative, non-abusive methods available for collecting debts effectively.

Abusive debt collection practices often involve interstate commerce, affecting the economy and commerce across state lines.

The purpose of this law is to eliminate abusive debt collection practices and ensure that debt collectors who don't use these tactics aren't put at a disadvantage.

Expand your knowledge: The Debt Collectors

False or Misleading Representations can be a serious issue in business and marketing.

The Federal Trade Commission (FTC) defines a deceptive act or practice as any act or practice that is likely to mislead consumers, including making false or misleading representations.

False or misleading representations can take many forms, including exaggerated claims, incomplete information, and omissions.

In the US, the FTC requires companies to have reasonable evidence to support any claims they make about their products or services.

The FTC also requires companies to clearly disclose any material connections between themselves and any endorsers or reviewers of their products or services.

State laws have a significant role in debt collection practices. The federal subchapter does not annul or alter state laws that provide greater protection to consumers.

State laws that offer more protection to consumers than the federal subchapter are not considered inconsistent with federal law. This means that consumers can benefit from both federal and state laws that work in their favor.

The federal subchapter does not exempt anyone from complying with state laws, except to the extent that those laws conflict with federal provisions. If a state law is inconsistent with federal law, it will only be exempt to the extent of the inconsistency.

State laws that provide greater protection to consumers are not seen as inconsistent with federal law, so they can coexist and benefit consumers.

On a similar theme: Bad Debt Protection

Debt collection practices can be exempt from federal regulations if a state has similar requirements.

The Bureau can exempt a class of debt collection practices if it determines that the state's laws are substantially similar to federal regulations.

To qualify for exemption, a state must have adequate provisions for enforcement.

This means that states with robust laws and effective enforcement mechanisms can opt out of federal regulations.

A debt collector must send a written notice within five days of initial communication, containing the debt amount, creditor name, and a statement that the debt will be assumed valid unless disputed within 30 days.

This notice must also state that if the consumer disputes the debt in writing within 30 days, the debt collector will obtain verification of the debt and mail it to the consumer.

If the consumer disputes the debt or requests the name and address of the original creditor in writing within 30 days, the debt collector must cease collection until verification is obtained and mailed to the consumer.

The debt collector can continue other collection activities during this 30-day period, but must not overshadow the consumer's right to dispute the debt or request the original creditor's information.

The failure to dispute a debt within 30 days does not constitute an admission of liability by the consumer.

Broaden your view: What Should You Not Say to Debt Collectors

Debt collectors can contact your employer, but only under certain circumstances. They can contact your employer to verify your employment, get your location information, or garnish your wages after a court has entered a judgment against you.

A debt collector can call your employer once to verify your employment, but if they don't receive a response to their written contact within 15 days, they can then call or contact your employer again.

Debt collectors can also contact your spouse, parents or guardian if you're under 18 or live with them, or your attorney about your debt. They can also contact credit reporting companies, but only if it's allowed by law.

Here are some specific situations where debt collectors can contact your employer or peers:

Debt collectors generally cannot contact your family, neighbors, or other people about your debt unless it's to get your location information, a court has given them permission, or it's reasonably necessary to effectuate a judgment after a court has entered one against you.

Validation is a crucial step in the debt collection process. A debt collector must send a written notice to the consumer within five days after the initial communication, unless the information is already contained in the initial communication or the consumer has paid the debt.

The notice must include the amount of the debt, the name of the creditor to whom the debt is owed, and a statement that the debt will be assumed valid by the debt collector unless disputed within thirty days.

The notice must also include a statement that if the consumer disputes the debt or any portion thereof in writing within the thirty-day period, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer.

A debt collector cannot assume a debt is valid if the consumer has disputed it in writing within the thirty-day period.

The debt collector must cease collection of the debt until verification of the debt or a copy of a judgment is obtained and mailed to the consumer.

Collection activities can continue during the thirty-day period, but they must not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt.

The failure of a consumer to dispute the validity of a debt does not constitute an admission of liability.

Here's an interesting read: Will Debt Collectors Sue You in Sc

Furnishing Deceptive Forms is a serious issue in debt collection. It's unlawful to design, compile, and furnish forms that create a false belief in a consumer that someone other than the creditor is participating in debt collection.

This type of deception can be particularly damaging to consumers who may already be vulnerable due to financial stress. It's a form of manipulation that can lead to further anxiety and financial difficulties.

Any person who violates this section is liable to the same extent as a debt collector under section 1692k of the Fair Debt Collection Practices Act. This means they can face serious consequences for their actions.

The consequences of furnishing deceptive forms can be severe, and it's essential for debt collectors to follow the law to avoid these repercussions.

Debt collectors must bring legal actions in specific judicial districts or similar legal entities, depending on the type of action and the location of the real property securing the consumer's obligation.

For your interest: Is It Legal for Debt Collectors to Charge a Fee

You can sue a debt collector in a federal district court or a court of competent jurisdiction within one year from the date of the violation. This is a crucial deadline to keep in mind.

The court will consider the debt collector's frequency and persistence of noncompliance, as well as the nature and extent of such noncompliance, when determining the amount of liability. This can impact the amount of damages you may be awarded.

If you're bringing a class action, the court may award damages without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1% of the debt collector's net worth. This is a significant potential outcome for class actions.

A debt collector may not be held liable if they show that the violation was not intentional and resulted from a bona fide error, despite maintaining procedures to avoid such errors. This is a key defense that debt collectors may use.

Related reading: What Is a Bill Collector

If a debt collector contacts you about a debt that you don't owe, respond as soon as possible in writing to dispute the debt. This is crucial, as failing to do so may lead to further collection attempts and even a lawsuit.

Make sure to respond within five days of the initial contact, as the debt collector must send a written notice, called a "validation notice", that includes the amount they think you owe, the creditor's name, and instructions on how to dispute the debt in writing.

The validation notice is a safeguard to prevent scams, so don't provide any personal or financial information until you receive this notice.

To dispute a debt, you should do so in writing within 30 days of the initial contact. This will require the debt collector to stop trying to collect the debt until they can provide verification.

You should dispute a debt if:

To support your dispute, include any relevant information, such as receipts or canceled checks, and send the dispute letter by certified mail with a return receipt.

Debt collectors may collect interest, fees, charges, or other expenses to your debt only if they are expressly authorized by the agreement creating the debt.

You have the right to ask the debt collector to explain the charges and provide a written explanation. To do so, send a letter to the debt collector asking for an explanation in writing.

You may also want to consult an attorney to find out whether the debt collector is charging you more than allowed by law or by the agreement creating the debt.

Broaden your view: Debt Collector

Interest Charges can add up quickly, but there are rules to keep them in check.

Debt collectors can only charge interest, fees, or other expenses if they're explicitly allowed by the agreement creating the debt or by law.

You have the right to know how much interest you're being charged and why, so be sure to ask.

Send a letter to the debt collector asking for an explanation in writing, and they must respond.

To determine if the debt collector is charging you more than allowed, consider consulting an attorney.

A unique perspective: Is It Illegal for Debt Collectors to Call You

If you notice unauthorized deductions from your wages or benefits, it's essential to take action quickly.

Debt collectors can only deduct money from your paycheck, bank account, or benefits if they've already sued you and a court entered a judgment against you.

This means that if you're being sued by a debt collector, you'll receive a summons notifying you of the lawsuit.

Ignoring the summons can lead to a default judgment against you, allowing the collector to garnish your wages and bank account.

Certain federal benefits, such as social security benefits and veterans' benefits, are generally protected from garnishment.

If you're being sued by a debt collector, consulting an attorney can help you understand your options and protect your rights.

Related reading: Can Debt Collectors Freeze Your Bank Account

If you believe a debt collector is violating the law, you may report your complaint with the Attorney General's Office, which uses complaints to learn about misconduct.

The Attorney General's Office cannot give legal advice or provide legal assistance to individuals, so if you need help finding an attorney, you can look up Attorneys/Lawyers for more information.

Consider reading: Debt Collectors Threatening Legal Action

You may also report your complaint to the FTC, which enforces the federal Fair Debt Collection Practices Act that prohibits abusive, unfair, or deceptive debt collection practices.

The FTC takes complaints seriously and may forward them to the company involved, working to get a response from them.

You can also report your complaint to the CFPB, which may forward it to the company and work to get you a response.

Take a look at this: When Do Collection Agencies Report to Credit Bureaus

Debt collectors may still try to collect on old debts, even if they're time-barred from suing you.

In California, there's generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement. However, it can be tricky to figure out when the clock on that period starts to run or can be restarted.

A partial payment of the debt may restart the clock, making it hard to determine when the debt is truly time-barred.

Debt collectors who are time-barred from suing may still send you collection notices, call you to try to get you to pay, or report your debt to credit reporting companies.

You may want to consult an attorney if you think your debt may be time-barred, as they can help you navigate the situation.