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3 Dangerous FDCPA (Fair Debt Collection Practices Act) Myths
By: Steven Austin
Think you’ve got the FDCPA (Fair Debt Collection Practices Act) figured out?
Don’t be so sure. While nothing can take the place of a lawyer’s advice, if
you’ve at least overcome these three dangerous myths about the law, you may save
yourself a lot of money and heartache.
FDCPA Myth 3: the Fair Debt Collection Practices Act is the only law governing
collections
Fact: The FDCPA is a US federal law. Each state has additional laws that govern
fair debt collection practices. Some portions of those laws may have been
invalidated by the federal law. But, as a general rule, state laws are valid if
they provide greater protections (or restrictions, depending on your point of
view), and invalid if they allow debt collectors too much leeway. Meanwhile,
other countries have their own laws, which may or may not apply if the collector
or debtor is currently located outside the US.
Reality: it is important to keep in mind all the relevant state laws. Those
state laws may include the laws of up to three or even more states: the debtor’s
current state of residence, business, and/or work; the debt collector’s state;
and the state of any outside collection agency. The multiplicity of laws is just
one reason why lawyers are so often brought into the collections process,
especially when the amounts are large.
Debt collections that cross national borders are notoriously complicated,
whether it’s a US collector seeking payment from a foreign national or vice
versa. That’s just one reason that businesses that have a large customer base in
another country will often open a branch office there.
FDCPA Myth 2: if a collector violates fair debt collection practices, the debt
is thrown out.
Fact: it’s true that unfair debt collection practices will likely cost the
collector the judge’s sympathy if the collections go to court. But the Act does
not say that the debt itself will necessarily be invalidated.
That may be why some unscrupulous collectors still violate the law. Of course,
as already noted, breaking the law is not a good idea, since the collectors will
lose much if not all of whatever moral standing they might have had. Besides,
who wants to be sued for damages—especially by the person who still owes you
money?
Reality: it’s in the best interest of anyone who owes money to document any
FDCPA violations, and in the best interest of debt collectors to follow fair
debt collection practices scrupulously.
The Number-One FDCPA Myth: the Fair Debt Collection Practices Act is hard to
follow
Fact: the Act’s requirements are nothing more than common sense and basic
courtesy. The days of debtors’ prison or publishing debtors’ names in the
newspaper are over, and threats are strictly for the mafia. Any attempt to
collect a debt through humiliation or intimidation, or anything hinting at
intimidation or humiliation, should be avoided.
Reality: The vast majority of violations could have been avoided if the debt
collectors had simply put themselves in the other person’s shoes and thought
about how they would feel if they were treated in the same way. This also means
that it is not in fact easy for debtors to get out of their obligations by
turning the tables on the organizations to which they owe money.
In short, we’ve come a long way since the days when debtors might have ended up
in the stocks, and the FDCPA is largely to thank. But if you take fair debt
collection practices lightly, you may find your troubles make a day in the
stocks look pleasant.
About the Author:
Joel Walsh is a regular contributor to Collection Agency Information
(http://www.collection-agency-information.com). Find out the inside story on
debt and collections with secrets gathered from real collection agencies:
http://www.collection-agency-information.com/collection-agency-articles/collection-agency-articles.html
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