If you're dealing with debt collectors, it's essential to know who they are and what their licensing requirements are. In the United States, debt collectors are regulated by the Federal Trade Commission (FTC).
The FTC requires debt collectors to be licensed by the state where they operate, and some states have additional licensing requirements. For example, in California, debt collectors must register with the California Department of Financial Protection and Innovation.
Debt collectors must also comply with the Fair Debt Collection Practices Act (FDCPA), which prohibits harassment, false statements, and other unfair practices.
Regulations and Laws
Debt collectors are regulated by federal and state laws to ensure they don't engage in unfair or deceptive practices. Under the Federal Debt Collection Practices Act, debt collectors cannot contact you at inconvenient times or places, such as before 8:00 a.m. or after 9:00 p.m.
Debt collectors must also respect your attorney-client relationship, and if they're aware that an attorney represents you, they must direct all communications to your attorney. This helps prevent harassment and ensures that your rights are protected.
In Maryland, collection agencies must obtain a license from the Department of Labor, Office of Financial Regulation. You can check a collection agency's license status through NMLS, a multistate platform for licensing.
Here are some practices that are prohibited by Maryland's Consumer Debt Collection Act:
- Using or threatening force or violence
- Threatening criminal prosecution unless a violation of criminal law is involved
- Disclosing, or threatening to disclose, information affecting your reputation for creditworthiness if they know the information is false
- Contacting your employer about a debt before obtaining a final judgment
- Disclosing or threatening to disclose to a person other than you and your spouse (or if you are a minor, your parent(s)), information affecting your reputation if they know that the person the debt collector is telling does not have a legitimate need for the information
- Communicating with you or anyone related to you at unusual hours, too often, or in a way that harasses, oppresses, or abuses
- Using bad language in communicating with you or anyone related to you
- Claiming, attempting, or threatening to enforce a right knowing that the right does not exist
- Using a communication that resembles a legal or judicial process or gives the appearance of being authorized, issued, or approved by a government agency or lawyer
If you suspect a debt collector of violating the Fair Debt Collection Practices Act, you can submit a consumer complaint to the Federal Trade Commission.
Regulations and Laws
Debt collectors must abide by the Fair Debt Collection Practices Act (FDCPA), which is a federal law that regulates their activities.
The FDCPA prohibits debt collectors from using unfair or predatory practices to collect debt. This means they can't harass or intimidate you into paying.
If you're being contacted by a debt collector, you have rights under the FDCPA. For example, you can request that they stop contacting you, and they must comply.
Debt collectors can only contact you to collect a legitimate debt that they've purchased from a creditor. If the statute of limitations on debt has passed, they can't contact you to collect.
Here's a summary of the key regulations and laws that govern debt collectors:
- Fair Debt Collection Practices Act (FDCPA): a federal law that regulates debt collectors.
- Debt collectors must purchase a legitimate debt from a creditor to contact you.
- Debt collectors can't contact you if the statute of limitations on debt has passed.
Debt collectors are also subject to state regulations, which may provide additional protections for consumers.
Agency Licensing Requirements
In Maryland, collection agencies must obtain a license from the Department of Labor, Office of Financial Regulation. You can check a collection agency's license status through NMLS, a multistate platform for licensing.
If you suspect a business is operating as an unlicensed collection agency, contact an attorney for assistance. Any judgments obtained by an unlicensed business are void.
There is no time limit for asserting that a judgment is void due to lack of a collection agency license. This means you can challenge a judgment at any point, even if it was obtained years ago.
To verify a collection agency's license, use the NMLS platform. This will give you peace of mind and help you avoid dealing with unlicensed collectors.
Exemptions Under Federal Law
Debt collectors are prohibited from contacting you at inconvenient times or places, such as before 8:00 a.m. or after 9:00 p.m.
If a debt collector knows your employer doesn't allow you to receive communication at work, they cannot contact you there.
Debt collectors cannot engage in conduct that is intended to harass, oppress, or abuse you, including making repeated phone calls to annoy you.
Debt collectors cannot lie about the debt or consequences for non-payment, including falsely representing the amount owed or claiming to be attorneys or government representatives.
They also cannot threaten to take legal action that they do not intend to take.
Debt collectors generally cannot disclose information about the debt to third parties, except to obtain your contact information.
Debt collectors are prohibited from using unfair practices, including attempting to collect interest, fees, or charges that are not part of the debt.
Fair Practices Act
Under the Fair Debt Collection Practices Act, debt collectors can't contact you at inconvenient times or places, such as before 8:00 a.m. or after 9:00 p.m. They also can't contact you at work if your employer doesn't allow it.
Debt collectors can't harass or abuse you, which includes making repeated phone calls to annoy you, using threats or intimidation, or using bad language. They also can't publish your name or information related to your debt in an attempt to coerce you to pay.
You have the right to request that debt collectors cease communication with you, and they must comply. Debt collectors can't disclose information about your debt to third parties, except to obtain your contact information.
Here are some specific practices that are prohibited under the Fair Debt Collection Practices Act:
- Using or threatening force or violence (Maryland's Consumer Debt Collection Act)
- Threatening criminal prosecution unless a violation of criminal law is involved (Maryland's Consumer Debt Collection Act)
- Disclosing or threatening to disclose false information affecting your reputation for creditworthiness (Maryland's Consumer Debt Collection Act)
- Contacting your employer about a debt before obtaining a final judgment (Maryland's Consumer Debt Collection Act)
- Disclosing or threatening to disclose information affecting your reputation to someone who doesn't have a legitimate need for it (Maryland's Consumer Debt Collection Act)
If you suspect a debt collector of violating the Fair Debt Collection Practices Act, you can submit a consumer complaint to the Federal Trade Commission.
State-Specific Information
In California, debt collectors must register with the Secretary of State and provide a surety bond to ensure they're operating lawfully.
Debt collectors in California can't contact you before 8 am or after 8 pm, and they must give you a written notice within five days of the first contact, including the amount you owe and the name of the creditor.
In New York, debt collectors must be licensed by the Department of State and maintain a surety bond to cover potential losses.
Maryland Consumer Act
In Maryland, debt collectors are held to a high standard under the Consumer Debt Collection Act. They may not use or threaten force or violence.
Debt collectors are also prohibited from threatening to disclose information that could harm your creditworthiness if they know the information is false. This means they can't make up negative stories about you to try to collect a debt.
Debt collectors are not allowed to contact your employer about a debt before obtaining a final judgment. This is to protect your job and financial stability.
Here are some specific things debt collectors may not do in Maryland:
- Threaten criminal prosecution unless a violation of criminal law is involved.
- Disclose, or threaten to disclose, information affecting your reputation for creditworthiness if they know the information is false.
- Contact your employer about a debt before obtaining a final judgment.
- Disclose or threaten to disclose to a person other than you and your spouse (or if you are a minor, your parent(s)), information affecting your reputation if they know that the person the debt collector is telling does not have a legitimate need for the information.
- Communicate with you or anyone related to you at unusual hours, too often, or in a way that harasses, oppresses, or abuses.
- Use bad language in communicating with you or anyone related to you.
- Claim, attempt, or threaten to enforce a right knowing that the right does not exist.
- Use a communication that resembles a legal or judicial process or gives the appearance of being authorized, issued, or approved by a government agency or lawyer.
Reading the law: Md Code, Commercial Law § 14-201 - 204.
New York
In New York, debt collection can be a significant concern for many individuals. Our debt lawyers at Simon Goldenberg, PLLC, help clients navigate this complex process.
National Collegiate Student Loan Trust is one of the entities that may file lawsuits for student loans in New York. If you've been served with a lawsuit, it's essential to seek legal assistance.
United Guarantee, Arrowood Indemnity, and Jefferson Capital Systems are also debt collectors that may target New Yorkers. Our debt relief attorneys can help defend against these entities.
If you're struggling with debt from credit cards, banks like Bank of America, Citibank, Capital One, and HSBC may be involved. Our lawyers can help you deal with these creditors.
New York debtors may also face lawsuits from law firms such as Mullooly, Jeffrey, Rooney & Flynn, LLP, and Sharinn & Lipshie, P.C. Don't let these firms intimidate you – we're here to help.
Debt collectors like ARS, NCO Financial, and LR Credit 44 may also be contacting you in New York. Our experienced attorneys can help you resolve these issues.
With the right legal assistance, you can resolve your debt in New York. Contact our law firm to discuss your options.
Agency
When dealing with state-specific debt collection, it's essential to know which agencies operate in your area. Many collection agencies have a national presence, but some specialize in collecting certain kinds of debts or work in specific areas.
Alcoria is a national collection agency that may operate in various states.
Encore Capital Group is a well-known national collection agency that has a significant presence in many states.
IC System is another national collection agency that offers debt collection services across the country.
PRA Group is a global debt collection agency with a presence in many states.
Qade is a national collection agency that may operate in multiple states.
Rocket Receivables is a national collection agency that offers debt collection services in various states.
Summit Account Resolution is a national collection agency that may operate in multiple states.
Frequently Asked Questions
What is the 777 rule with debt collectors?
The 777 rule restricts debt collectors from making more than 7 calls within a 7-day period to a consumer about a specific debt, and also prohibits calls within 7 days after a previous conversation. This rule aims to prevent harassment and protect consumers from excessive debt collection calls.
How do I verify a debt collector?
To verify a debt collector, look for their company name, street address, telephone number, and professional license number (if required by your state). Verifying this information can help ensure you're dealing with a legitimate and licensed debt collector.
What are the 11 words to stop a debt collector?
To stop a debt collector, use the phrase: "Please cease and desist all calls and contact with me, immediately." This 11-word phrase can provide significant protection against aggressive debt collection practices.
What are different names for debt collectors?
Debt collectors are also known as debt collection agencies, debt collection companies, or debt buyers. These names refer to companies that collect debts on behalf of creditors.
How long before a debt becomes uncollectible?
The time frame for a debt to become uncollectible varies by state and type of debt, typically ranging from 3 to 6 years, but can be longer in some cases. Check your local laws to determine the statute of limitations for your specific debt.
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