These are the biggest complaints about debt collectors

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Strong federal law, the Fair Debt Collection Practices Act, protects consumers from certain unfair collection practices. It applies only to outside or third-party debt collectors (not to creditors collecting their own debts) and only to personal (not commercial) debts. State laws may provide additional protection.

In its 2018 Annual Report to Congress on Debt Collection Complaints, the Consumer Financial Protection Bureau outlined collection complaints received by the Federal Trade Commission.

In 2018, the FTC received 84,500 complaints about debt collectors, compared to 88,000 in 2017. A complaint does not mean that a law has been broken, and some complaints may be the result of debt collection scammers in overseas who harass consumers.

1. Attempts to collect a debt not due

Percentage of complaints: 39%

The Law: If you believe the debt is not yours, you can send a request in writing within 30 days of receiving the initial notice that you want the debt checked. You can also request in writing that the collection agent no longer contact you.

2. Written notification of debt

Percentage of complaints: 22%

The law: Within five days of first contacting you, the collector must send a written notice of the debt that includes:

  • The amount of debt

  • The name of the original creditor to whom the debt is owed

  • A statement describing your right to dispute the debt

3. Communication tactics

Percentage of complaints: 13%

The Law: Collectors cannot repeatedly call just to harass you. (However, there’s no specific number of calls they can make in a given time frame. That’s up to the courts to decide.) If you think a debt collector calls too often, start recording every time he calls. and all the messages they leave. Collectors also can’t call before 8 a.m. or after 9 p.m. (unless you’ve allowed them to), or sometimes you’ve told them it’s not convenient.

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4. Has taken or threatened to take negative or legal action

Percentage of complaints: 11%

The law: Collectors can’t threaten a lawsuit, criminal prosecution, wage garnishment, jail time, or ruin your credit rating unless they have the authority legal to do so and that they intend to do so. These threats are often illegal. Collectors usually have to sue you first and win before they can take these kinds of actions – if they’re legal in the first place.

5. False statements or representations

Percentage of complaints: 10%

The law: Collectors can’t threaten a lawsuit, criminal prosecution, wage garnishment, jail time, or ruin your credit rating unless they have the authority legal to do so and that they intend to do so. These threats are often illegal. Collectors usually have to sue you first and win before they can take these kinds of actions – if they’re legal in the first place.

6. Threatened to contact someone or share information inappropriately

Percentage of complaints: 4%

The law: Collectors can call third parties such as family, neighbors, friends or co-workers only to locate the debtor. When they do, they cannot reveal the debt and there are limits on repeat calls.

Debt Collection Laws

The Fair Debt Collections Practices Act (FDCPA) is a federal law in place to limit what debt collectors can do and say when trying to collect a debt. This federal law covers a variety of cases, including mortgages, credit cards, medical debt, and any other debt for personal, family, or household purposes.

Unfortunately, the debt that the FDCPA cannot cover is commercial debt or debt owed to the original creditor, rather than the collection agency.

As noted above, time and place, harassment, and representation are all addressed in these federal laws. A debt collector cannot contact you in an unusual place or at an unusual time that would be inconvenient.

They are required to refrain from using any type of harassing methods or scare tactics regarding the debt that may be owed. Also, if they know you have requested legal representation for the case, they should immediately stop communicating directly with you and instead contact the attorney.

The Fair Credit Reporting Act

Another federal law is the Fair Credit Reporting Act, and this law covers certain financial aspects, including any debt collected and reported on your credit report.

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Under this law, it protects against unfair, deceptive or abusive acts or practices to be committed by collection agencies or a creditor. There are also state laws regarding debt collection practices, and many of these state laws are very similar to those described by the Fair Debt Collection Practices Act.

To learn more and get more information about specific debt collection laws in your state, you can contact the state attorney general’s office with any questions you may have.

How to get help

If you think a debt collector or collection agency broke the law while trying to collect a debt, you can:

  • File a complaint with the CFPB and your Attorney General, and/or

  • Contact a consumer law attorney. You may be entitled to damages and/or attorneys’ fees.

Whenever you face debt, it is a good idea to review your credit reports for accuracy, as errors can unnecessarily damage your credit rating. You can learn more about how to dispute credit report errors here.

A collection account can have a major impact on credit rating. If you have been contacted by a collector and are concerned that your credit may be compromised, you should check your credit report.

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