If you’re behind on your bills or wrongly labeled as such by a creditor, a debt collector might contact you. The Federal Trade Commission (FTC), which protects consumers in the U.S., enforces the Fair Debt Collection Practices Act. This law ensures debt collectors can’t use abusive, unfair, or deceptive methods to collect debts.
A debt collector is considered any business that regularly collects debts owed to others. This includes collection agencies, lawyers who handle debt collection regularly, and companies that buy unpaid debts and try to collect them.
Here’s a breakdown of your rights under the Act:
**What types of debts are covered?**
The Act covers personal, family, and household debts, like credit card debt, car loans, medical bills, and mortgages. Business debts are not included.
**When can debt collectors contact me?**
Debt collectors can’t reach out to you at inconvenient times or places, such as before 8 AM or after 9 PM, unless you agree. They also can’t contact you at work if they know you can’t take calls there.
**How do I stop a debt collector from contacting me?**
It’s often helpful to talk to the collector at least once to resolve the issue. If you want them to stop contacting you, write a letter to them, make a copy, and send it by certified mail with a return receipt. After they receive it, they can only reach out to tell you they won’t contact you again or to inform you of specific actions they’re going to take, like a lawsuit.
**Can a debt collector tell others about my debt?**
If you have an attorney about the debt, the collector must talk to them instead of you. If you don’t have an attorney, they can only contact others to get your address, phone number, and workplace.
**What information must a debt collector provide?**
Within five days of first contacting you, a collector must send a written “validation notice” detailing the amount of debt and the creditor.
**What actions are considered illegal for debt collectors?**
Collectors can’t harass you or use false statements. This means no obscene language, no threats of violence, and no repetitive calls intended to annoy. They also can’t lie about who they are or the amount you owe.
**Can I choose where my payments go?**
Yes. If you have multiple debts, your payment must be applied to the debt you specify.
**Can a debt collector take money from my bank account or paycheck?**
If you don’t pay a debt, the creditor or the collector can sue you. Wage garnishment (where part of your wages is taken to pay the debt) usually requires a court order.
**Can federal benefits be garnished?**
Some federal benefits are protected from garnishment, though they can be garnished for certain debts, like unpaid taxes, child support, alimony, or student loans.
**What if a debt collector breaks the law?**
You can sue the collector in a state or federal court.
**What should I do if a debt collector sues me?**
Respond to the lawsuit to preserve your rights and utilize available debt help resources.
**Where can I report debt collectors who break the rules?**
You can report issues with debt collectors to your state’s Attorney General’s office or the FTC. For more information, check out the FTC’s resources or visit MyMoney.gov for financial education.