Last updated Oct. 19, 2018.
Being unable to pay back a debt that you owe is one of the most frustrating experiences for millions of Americans each year. But the experience is often made much worse by the conduct of unscrupulous third-party debt collectors, who engage in harassing communications and even threaten debtors in the hope of frightening them into paying back their debts.
Fortunately for those facing such conduct, the law is on your side. Federal law protects you from the predatory, harassing, and fraudulent actions of debt collectors. Additionally, throughout most of the United States, there are state statutes offering similar—or even greater—protection.
The federal Fair Debt Collection Practices Act (FDCPA) is a set of federal laws that protect consumers from debt collectors by making certain types of behavior illegal when debt collectors are trying to collect a debt. The FDCPA is enforced by the Federal Trade Commission (FTC), and California has similar statutes at the state level.
Article at a Glance
- The FDCPA restricts how and when debt collectors can attempt to collect a debt from a consumer.
- The restrictions in the FDCPA apply to third-party debt collectors, not creditors, but the distinction between those two types of businesses is not always clear.
- If you believe that a debt collector has violated the law in attempting to collect a debt from you, you should contact an experienced California debt collection attorney for help determining how best to proceed.
Your Rights Against Debt Collectors
The FDCPA regulates how and when a debt collector can contact you. It also defines what constitutes harassment and abuse of a debtor. The Act prescribes how communication with a debtor or with a third party must be handled and sets out many other restrictions on debt collectors.
Under the FDCPA, debt collectors must be honest – they can’t claim they’re attorneys or anything else but debt collectors. They can’t threaten you, and they must stop contacting you if you ask them to.
Creditor vs. Debt Collector
Note that the FDCPA distinguishes between debt collectors, to which its restrictions apply, and creditors, to which they do not. You should be aware of the difference if you intend to file a complaint or seek legal counsel over a perceived FDCPA violation.
Under the FDCPA:
- A creditor is “any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another;” and
- A debt collector is “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”
In short, the FDCPA doesn’t cover the party that you originally borrowed from, such as a bank or credit union. As the U.S. Supreme Court explained in 2017, it also doesn’t cover a business that buys defaulted debt to collect that debt on its own account. It only covers third-party debt collectors and debt collection agencies, which are typically hired by the original creditor.
Establishing whether your rights have been violated by a debt collector or a creditor is the first step in determining your recourse.
Of course, this being the law, these definitions are subject to various exceptions and limitations that you should discuss with a debt collection attorney when investigating whether you should file a complaint.
Filing a Complaint Against a Debt Collector
If your rights were violated by a debt collector, there are several options available to you.
Option 1: Filing an FDCPA Lawsuit
You, as the consumer, can file a lawsuit against the debt collector for FDCPA violations, and if applicable, violations of California’s debt collection laws.
If you are suing for both federal and state violations, you have a choice to file your case in either federal or state court. Depending on the type and extent of the violation, you may be entitled to a monetary award of damages. Keep in mind that these types of suits are best handled by a debt collection attorney and can last a long time before a resolution is achieved.
To expedite the process, you can file your case in your local small claims court. In small claims court, you will generally get your case resolved in a matter of months as opposed to years.
These courts are often set up so that you can represent yourself. However, small claims courts have jurisdictional limits that other state and federal courts do not. You must check with your local court rules to ensure that you are not suing for an amount greater than the small claims court’s limits.
Option 2: Filing an FDCPA Complaint with Regulators
An alternative to filing a lawsuit is to simply file a complaint online with the FTC. Another federal agency, the Consumer Financial Protection Bureau (CFPB) operates as a watchdog over creditors and debt collectors. You can file an online complaint with the CFPB, which will in turn contact the creditor and attempt to find a resolution.
California consumers can also contact the California attorney general’s office. The state attorney general is charged with protecting consumers from unfair or deceptive trade practices. Making a report to the state attorney general’s office of your complaint is another great option. Although the attorney general cannot personally represent you, the office can take action against the entity that has violated your rights.
If your rights have been violated by a bank or other lender, as opposed to a debt collector, you should contact an experienced California debt collection attorney to learn more about your rights. The body of law governing lenders is extremely complicated and a claim against them will be nearly impossible to manage on your own.
It is important to review your options and act promptly to stop the violations of your rights. Sometimes, when extensive law is involved, such as the FDCPA, seeking the guidance of an attorney is the best way to ensure you get the remedies you deserve.
We Can Help
We’re all too familiar with the unpleasant tactics used by debt collectors and we’re standing by to help you fight for your rights. If you believe a debt collector has violated your rights, contact our experienced California attorneys today for a free consultation and case evaluation. We can help you decide how best to handle your case and guide you through the legal process.