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Federal and state laws regulate the collection of debts. The applicable federal law is the Fair Debt Collection Practices Act, or FDCPA. The FDCPA governs the techniques a debt collector may employ in the collection of a debt. The FDCPA does not apply to those creditors who collect debts in-house or to government employees whose job is to collect government debts, such as student loans.

Prohibited Debt Collection Practices

A debt collector is not allowed to violate a debtor's privacy or use abusive or harassing collection tactics. A debt collector may not:

• Telephone a debtor before 8 a.m. or after 9 p.m.
• Telephone repeatedly as a form of harassment
• Use obscene language, make racial or religious slurs or comments about a debtor's character
• Contact a debtor at work if prohibited by the debtor's employer or upon the debtor's request
• Contact a debtor when the debtor hires an attorney for debt collection purposes
• Claim that papers are legal papers when they are not
• Send forms that appear to be legal papers when they are not
• Falsely accuse a debtor of a crime
• Threaten a debtor with violence
• Garnish wages or sell property if not allowed by law
• Threaten to sue a debtor when no suit is intended
• Lie about the amount of the debt
• Threaten arrest
• Continue contact with a debtor after the debtor gives written notice to cease contact
• Misrepresent their identity
• Advertise a debt for sale or distribute a list of debtors
• Leave telephone messages with third parties disclosing the existence of the debt
• Sending a debt collection letter without disclosing that the letter is for the collection of a debt and that any information obtained from a debtor may be used for that purpose.

Permissible Practices

There are a number of things that a debt collector is allowed to do. A debt collector may:

• Sue to collect a debt
• Access a debtor's credit report
• Report truthful negative information on a debtor's credit report
• Send mail in care of another person sharing a debtor's address
• Attempt to collect the debt from a co-signer
• Add charges allowed by law to the debt or agreed to in the original creditor agreement
• Contact a debtor by mail (the envelope must not reference the debt)

Conclusion

Debtors have certain rights under federal law that require debt collectors to respect a debtor's privacy and to refrain from using abusive debt collection practices. Violations may be addressed with the FTC, state agencies, or through individual litigation.