The federal Fair Debt Collection Practices Act, known at the "FDCPA," requires collection agencies to take certain actions:
- The collection agency must stop contacting you if you so request in writing or if you dispute the debt in writing.
- The collection agency, in its initial communication or within five days of that communication, must send you a written notice that identifies the debt and gives you the right to dispute the debt or to request the name and address of the original creditor, if different from the current one. If you raise a dispute, the collector must suspend collection efforts on the disputed portion of the debt until the collector responds to the request. (Note that your failure to dispute a debt is not an admission of liability. The collector would still have the burden of proof in any court action to collect the debt.)
- Any lawsuit by a collector must usually be brought in the same county or other judicial district where you reside or signed the contract.
The following collection agency conduct violates the FDCPA:
- Communicating with third parties, such as your relatives, employers, friends, or neighbors, about a debt unless you or a court has given the collector permission to do so. Several narrow exceptions to this prohibition apply. Collectors may contact creditors, attorneys, credit reporting agencies, cosigners, your spouse, and your parents if you are a minor. Third party contacts are also permitted if the contacts are solely for the purpose of locating you and do not reveal in any way the contact's underlying purpose.
- Communicating with you at unusual or inconvenient times or places. The times 8:00 a.m. to 9:00 p.m. (In the time zone where you live) are generally considered convenient.
- Contacting you at work if the collector should know that the employer prohibits personal calls, or contacting you at other inconvenient places, such as
a friend's house or the hospital.
- Contacting you if you are represented by a lawyer, unless the lawyer gives permission for the communication or fails to respond to the collector's
- Contacting you when you write a letter asking the collector to cease communications. The collector is allowed to acknowledge the letter and to notify you about actions the creditor or collector may take.
- Using obscene, derogatory or insulting remarks.
- Publishing your name.
- Telephoning repeatedly and frequently.
- Telephoning without disclosing the collector's identity.
- Making communications that intimidate, harass or abuse you, such as a threat to conduct a neighborhood investigation of you, or telling you that you should not have children if you cannot afford them.
- Making false, misleading or deceptive representations in collecting debts, such as pretending that letters carry legal authority.
- Falsely representing the character, amount or legal status of a debt, or of services rendered or compensation owed.
- Falsely stating or implying a lawyer's involvement, such as where form letters written on an attorney's letterhead and bearing an attorney's signature in fact came from a collection agency and were not reviewed by a lawyer.
- Threatening arrest or loss of child custody or welfare benefits.
- Stating that nonpayment will result in arrest, garnishment or seizure of property or wages, unless such actions are lawful, and unless the creditor or the
collector fully intends to take such action.
- Threatening to take actions that are illegal or that are not intended. To verify a collector's intention to file suit, you could ask the local court clerk to help you check the plaintiff's index to see whether the company making the threat has a history of filing similar suits. Suit is less likely the smaller the debt (e.g., less than $500), the more distant the collector, and the stronger the consumer's dispute of the debt. Other common threats that the creditor may have no intention of pursuing are that the collector will refer the action to a lawyer, harm your credit rating, or repossess household goods.
- Using any false representation or other deception to collect or to attempt to collect any debt or to obtain information about you.
- Failing to disclose in communications that the collector is attempting to collect a debt.
- Using unfair or unconscionable means to collect debts.
- Collecting fees or charges unless expressly authorized by the agreement creating the debt and permitted by law.
- Depositing post-dated checks before their date. The collector also must give at least three days, but not more than ten days notice, before depositing the postdated check, or using the check for the purpose of threatening or filing criminal charges.
- Causing expense to another party while concealing the purpose of the communication, for example, by making collect telephone calls and sending collect telegrams.
- Threatening self-help repossession without the legal right to do so, or if the collector has no present intent to do so.
- Creating the false impression that the collector is an affiliate or agent of the government.
- Using any communication, language, or symbols on envelopes or postcards that indicate that the sender is in the debt collection business.
What if the FDCPA does not apply? The FDCPA applies to collection agencies and lawyers. It does not generally cover creditors or their employees collecting their own debts. That is, the FDCPA only applies to an independent debt collection agency hired by a creditor to collect its debts and when a creditor hires an attorney to collect its debts.
If the FDCPA does not apply to collection efforts, you still have legal remedies for debt collection harassment. These remedies will mostly involve state law, not federal law.
The Iowa Debt Collection Practices Act prohibits most of the practices listed above. It does not, however, require a debt collector to send the initial verification notice that gives you the opportunity to verify or dispute the debt. The Iowa Act also does not require a debt collector to stop contacting you if you request collection efforts to cease. You can, however, request that a debt collector not call you at work or at inconvenient times.
Like the FDCPA, the Iowa Act applies to most debts that are made for personal, family and household purposes (not business debts). The Iowa Act is broader than the FDCPA in that it applies to all debt collectors, even persons who are collecting their own debts.