Consumer Debt Collection And The Law

When the cash owed to a debt collector arises out of a transaction in which goods or services have been purchased for personal consumption, the Fair Debt Collection Practices Act (FDCPA) is applicable. This federal law protects consumers from ill treatment and abuse by debt collectors. Other federal and state laws are also applicable. The federal laws apply not only to all debt collectors but attorneys as well.

FDCPA limits the extent to which debt collector can trouble debtors. If the debtor's rights are being violated and the debtor files a suit against the collector, the collector may have to pay the debtor's attorney fees in case the debtor wins. A consumer can recover actual damages plus an additional amount up to $1000 under FDCPA. The debt collector along with paying damages has a lot more at stake like court fees, insurance and governmental regulatory action. The debt collector is ought to be truthful to the debtor and must treat him with respect.

A debt collector cannot contact the debtor at unreasonable times. If the debtor has informed the collector not to call him, he has to stop contacting but contact him one last time to tell if he is going to take any specific action. The collector cannot use abusive language. If the consumer has appointed an attorney, the collector has to contact the attorney and not the consumer directly. The collectors have no right to inform any third person about the debtor's debt. The debt collector cannot use unfair means or false statements to collect debts nor he cannot threaten the debtor. The debtor must maintain a detailed copy of all communication with the collector.

In a span of five days from the date the debtor was 1st contacted by the collector, the collector has to send a notice to the debtor stating details like the amount of debt, the creditor to whom the debt is owed, and what should the debtor do in case he does not owe the creditor.

A consumer has a number of consumer protections that guard him against harassment. FDCPA extends a helping hand to all consumers who have been abused, harassed or arrested for non-payment of debt. All that is required is consumer awareness. The consumers need to be made aware of their legal rights.

Appointing a lawyer to collect debts saves time on the part of the creditor. For a collector to collect debts on his own is not only expensive, but also distracts the collector from what he should be doing. The attorney should be contacted as soon as possible because if the debtor company goes into liquidation, it becomes very difficult to collect the dues. Time is the single most important factor in the recovery of overdue debts. Patience in recovery of debts is no virtue.

An advantage of hiring an attorney over a debt-collecting agency is that the debtor may toss away notices received from the agency without even opening them. There are hardly any people who would toss away letters into the trash unopened if it comes from an attorney. In many cases, creditor problems handled by the collection agency are ultimately turned over to collection attorneys. Many lawyers do not even charge any upfront fees. Therefore, hiring an experienced and knowledgeable debt collection lawyer is one of the best options open to creditors to collect their dues and saves time and money.