What Types of Debt Are Covered by the Fair Debt Practices Act?

 Posted on October 02,2024 in Debt Collection

American consumers hold almost $18 trillion in debt, with the average household owing about $104,215. Most of this is mortgage debt, followed by credit card and auto loan debt. These figures suggest that consumers are saddled with serious financial obligations that many of them might not be able to meet. The creditors who own this debt, like banks and credit card companies, use a variety of methods to try to collect payment for their claims.

The Fair Debt Collection Practices Act (FDCPA) places a limit on these methods, as this article will discuss. For more details and to learn about your rights under the FDCPA, contact a North Carolina Fair Debt Collection Practices Act attorney.

What Is the Fair Debt Collection Practices Act?

Creditors like mortgage lenders and credit card companies often do not have the time or resources to collect debt themselves, so they outsource the job to professional debt collectors. The Fair Debt Collection Practices Act (FDCPA) is part of the federal Consumer Credit Protection Act and offers a level of protection for consumers from debt collection companies. It prohibits them from engaging in certain practices in the process of trying to recover payments. Prohibited activities include:

• Calling borrowers at inconvenient times — usually before 8:00 AM or after 9:00 PM in the debtor’s time zone

• Calling borrowers at work if the debt collector has reason to believe the debtor’s employer does not approve of the communication

• Threatening, harassing, or abusing consumers, including the use of profanity or calling a borrower repeatedly to cause annoyance

• Pretending to be law enforcement or threatening to involve law enforcement

• Continuing to communicate with the borrower after he or she refuses to pay the debt

• Communicating with the debtor after he or she asks the creditor in writing to cease communications

• Falsely pretending to be a state or federal government official, an attorney, or using any other misrepresentation

• Using a postcard to contact the borrower

• Collecting any fee or charge from the borrower

Collection companies that violate any of the FDCPA’s rules can be sued and forced to pay potentially heavy penalties.

North Carolina has its own laws that closely parallel the FDCPA and also offer penalties.

What Debt Does the FDCPA Cover?

The FDCPA covers only debts that are incurred for personal, household, or family purposes. These include:

• Credit card debt

• Mortgage debt

• Auto loan debt

• Medical debt

• Past-due utility bills

• Student loan debt

• Rent payments

Debt that is not covered by the FDCPA includes business-related debt. Even a personal guarantee for a small business loan is not protected by the act.

Contact a Charlotte, NC Bankruptcy Attorney

Creditors have the right to try to collect money they are owed but that does not mean borrowers should be subjected to threats, harassment, or unfair practices. Contact Blossom Law PLLC to make sure your credit score and your rights under the FDCPA are protected. Schedule a free consultation with a Concord, NC Fair Debt Collection Practices Act lawyer by calling 704-256-7766 today.