Debt Collection

The Fair Debt Collection Practices Act (FDCPA) was enacted in 1978 as part of the Consumer Credit Protection Act. The purpose of this statute is to eliminate abusive methods of collecting consumer debts and to provide consumers with a means to verify and/or dispute information accuracy regarding a debt. Debt collectors are required to conduct business under the guidelines of this statute and failure to do so can result in criminal prosecution involving various penalties and compensations. This statute is sometimes used in combination with the Fair Credit Reporting Act. This act, for all practical purposes, defines the individual rights of the consumer in relation to the means by which a debt may be settled.

Debt Collector
The FDCPA gives a broad definition of a debt collector in terms of any person who uses any instrument of means or mail for the purposes of collecting a debt. It also encompasses those who utilize any means for the purposes of representing another party in the attempted collection of a debt that is owed to that other party. While the FDCPA usually only applies to third party debt collectors and not the internal collection agencies of single companies, there are states that extend consumer rights protection in this area, as well. This is also true in cases when a debt is purchased by a debt buyer. Even though the debt buyer now owns the debt (and is therefore collecting on their own debt), the courts will generally apply the FDCPA coverage to these cases, as well. There are numerous exceptions to the “debt collector” definition within the FDCPA – particularly after the passage of the Financial Services Regulatory Relief Act of 2006. Also, Attorneys (who were originally exempt from the FDCPA) have been included, since 1986.

Debt and Consumer
FDCPA definitions of “debt” and “consumer” restricts coverage to personal, family and household transactions while debts that are owed by businesses (or relate to business purposes) are not covered under the FDCPA.

Please note that this article is for informational purposes only and is not intended as legal advice.

You can contact the Jodat Law Group for more information, attorney Gary R. Jodat, serving Sarasota, Florida for more information.