Thank you for your correspondence regarding debt collection practices. The Federal Trade Commission enforces the Fair Debt Collection Practices Act ("FDCPA" or "Act"), which prohibits unfair, deceptive and abusive debt collection practices by collection agencies and other third-party debt collectors. It also gives you certain rights when you are being treated improperly by a debt collector. Although the FTC staff is not in a position to intervene on your behalf in resolving your problem, we would like to outline some of the provisions of the Act for you and explain how you can use it to avoid further distress. We note at the outset, however, that the Act generally does not cover either the collection of commercial debts or the collection activities of the party to whom you allegedly owe your debt (the creditor) so long as the creditor is collecting in its own name. The Act applies only to third-party debt collectors collecting consumer debts. Congress enacted the FDCPA in 1977 in response to mounting evidence of the use of improper debt collection techniques in the marketplace. The Act prohibits several of these techniques, including, for example, disclosing consumers' debts to most third parties without the consumers' consent. It also forbids false threats to coerce payment (such as threats of suit or other consequences that will probably never occur) and any sort of oral harassment (threats of violence, profanity, continuous calls) over the telephone. Calls to a consumer at work are restricted, and no calls may be made very early in the morning or late at night. Charges may not be added to the debt unless the consumer has agreed to them or they are permitted by state law. Finally, no suits against a consumer by a debt collector may be filed outside the district (1) of the consumer's residence or (2) where the contract creating the debt was signed. As you can see, there are many prohibitions in the Act, some of which are not mentioned here. Study the enclosed brochure carefully to see whether the problems you are experiencing violate any of the Act's prohibitions. Armed with knowledge of the Act, you may demand that the debt collector cease all further collection efforts. If you do so in writing (by letter, for example), the Act requires the collector to comply in most instances. We suggest that you send the letter by certified mail with a return receipt, and keep a copy for your records. If you believe that you do not owe the debt, you may file a dispute with the debt collector. If you do so in writing within thirty days of the date the collector notifies you of this right, the Act requires the collector to stop all collection efforts until the debt is verified and the verification is sent to you. The Act also specifies that the debt collector inform you of this requirement at the beginning of the collection process. If you were not so informed, the collector violated the law. If you believe that the debt collector who is contacting you violated the law in this or any other way, you may additionally: 1) File a complaint with your state or local consumer protection office and/or the party to whom you originally owed the debt (the debt collector's client). If you file a complaint, describe the circumstances in detail and send copies of all written materials received from the collector. Any of these parties might take independent action against the collector. 2) File a private suit against the debt collector in any court for violations of the Act and, if you are successful, receive actual damages and additional damages up to $1,000. Remember, however, that the Act does not function to erase a valid debt, even if a debt collector has violated the law in attempting to collect it from you. If you really owe the debt, you will still have to cope with the consequences of non-payment if you do not pay. Remember also that some collection techniques, while unpleasant or distasteful, are not law violations. For example, a debt collector may: 1) Contact third parties solely to determine where you are, so long as the collector does not disclose the existence of your debt. 2) Contact you at work if the debt collector has no reason to believe that your employer prohibits the contact (and you have not filed a cease-communication request). 3) Use a rude or angry tone on the telephone, if the overall communication with you cannot truly be characterized as abusive or harassing. 4) Threaten consequences of non-payment that are truthful. For example, debt collectors may threaten to sue if suit will, in fact, be the result of non-payment. They also may threaten to report your debt to a credit bureau if, in fact, they intend and are legally able to do so. It is to your advantage to know the probable result of withholding payment, if it is accurate. 5) Accept or solicit a post-dated check, if the collector does not deposit it before the date on the check. 6) Refuse to accept a partial payment for a debt (even if you had such an arrangement with the creditor). If there is more than one debt, the collector must credit the account that you designate. If you owe the debt, we suggest that, before you resort to some of the stronger measures outlined above, you try to work out any payment difficulties first with the debt collector and next with your creditor. Finally, if you decide to proceed further, or if you think that the collector or creditor is about to take legal action against you, be sure to contact your local legal aid office or an attorney for advice. Like the FDCPA provisions discussed above, you may also find certain Fair Credit Reporting Act (FCRA) provisions helpful if you believe that a debt collector is providing inaccurate information about you to a credit bureau. To fully protect your rights under the FCRA, we strongly recommend that you dispute the credit report item in writing to both the credit bureau and the debt collector. When you dispute the item to the credit bureau, the FCRA requires that the credit bureau pass your dispute to the debt collector, along with all relevant information you provided. The debt collector must investigate the dispute (which includes a review of the information you provided) and report what it found to the credit bureau within thirty days after you first disputed the item to the credit bureau. During this same period, the credit bureau must also review the information you provided. If the debt collector reports that the credit report item is incorrect and should be deleted, or fails to report to the credit bureau at all within the thirty-day period, the credit bureau must delete the item from its files. If the debt collector reports that the item is inaccurate and should be changed, but not deleted, the credit bureau must make that change in its files. We hope that this information has been helpful to you. Please be assured that we are always interested in reports of law violations. If we cannot act immediately to remedy them, we will retain whatever you have provided for possible use in future enforcement actions. The efficacy of our FDCPA enforcement program is largely dependent upon information we receive from persons like you. Thank you for writing.
How may a debt collector contact you? A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts. Can you stop a debt collector from contacting you? You can stop a collector from contacting you by writing a letter to the collection agency telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. May a debt collector contact anyone else about your debt? If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money. What must the debt collector tell you about the debt? Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money. May a debt collector continue to contact you if you believe you do not owe money? A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed. What types of debt collection practices are prohibited? Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, debt collectors may not: l use threats of violence or harm; l publish a list of consumers who refuse to pay their debts (except to a credit bureau); l use obscene or profane language; or l repeatedly use the telephone to annoy someone. False statements. Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not: l falsely imply that they are attorneys or government representatives; l falsely imply that you have committed a crime; l falsely represent that they operate or work for a credit bureau; l misrepresent the amount of your debt; l indicate that papers being sent to you are legal forms when they are not; or l indicate that papers being sent to you are not legal forms when they are. Debt collectors also may not state that: l you will be arrested if you do not pay your debt; l they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so; or l actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action. Debt collectors may not: l give false credit information about you to anyone, including a credit bureau; l send you anything that looks like an official document from a court or government agency when it is not; or l use a false name. Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not: l collect any amount greater than your debt, unless your state law permits such a charge; l deposit a post-dated check prematurely; l use deception to make you accept collect calls or pay for telegrams; l take or threaten to take your property unless this can be done legally; or l contact you by postcard. What control do you have over payment of debts? If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe. What can you do if you believe a debt collector violated the law? You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less. Where can you report a debt collector for an alleged violation? Report any problems you have with a debt collector to your state Attorney General's office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General's office can help you determine your rights. You can file a complaint with the FTC by contacting the Consumer Response Center by phone: 202-FTC-HELP (382-4357); by TDD: 202-326-2502; by mail: Consumer Response Center, Federal Trade Commission, Washington, DC 20580; or by e-mail: use the complaint form at www.ftc.gov. Although the FTC generally cannot intervene in individual disputes, the information you provide may indicate a pattern of possible law violations requiring action by the Commission. The Federal Trade Commission publishes a series of free, credit-related publications, including: Knee Deep in Debt, Fair Credit Reporting, and How to Dispute Credit Report Errors. For a complete list of FTC consumer publications, ask the Consumer Response Center for Best Sellers. You also can visit us at www.ftc.gov.
HOW TO DISPUTE CREDIT REPORT ERRORS Your credit report-a type of consumer report-contains information about where you work and live and how you pay your bills. It also may show whether you've been sued or arrested or have filed for bankruptcy. Companies called consumer reporting agencies (CRAs) or credit bureaus compile and sell your credit report to businesses. Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate. Some financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process. Getting Your Credit Report If you've been denied credit, insurance, or employment because of information supplied by a CRA, the FCRA says the company you applied to must give you the CRA's name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year if you certify in writing that (1) you're unemployed and plan to look for a job within 60 days, (2) you're on welfare, or (3) your report is inaccurate because of fraud. Otherwise, a CRA may charge you up to $8 for a copy of your report. If you simply want a copy of your report, call the CRAs listed in the Yellow Pages under "credit" or "credit rating and reporting." Call each credit bureau listed since more than one agency may have a file on you, some with different information. The three major national credit bureaus are: l Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111. l Experian (formerly TRW), P.O. Box 949, Allen, TX 75013; (800) 682-7654. l Trans Union, 760 West Sproul Road, P.O. Box 390, Springfield, PA 19064-0390; (800) 916-8800. Correcting Errors Under the FCRA, both the CRA and the organization that provided the information to the CRA, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the CRA and the information provider. First, tell the CRA in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the one on page 7. Send your letter by certified mail, return receipt requested, so you can document what the CRA received. Keep copies of your dispute letter and enclosures. CRAs must reinvestigate the items in question-usually within 30 days-unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. l Disputed information that cannot be verified must be deleted from your file. l If your report contains erroneous information, the CRA must correct it. l If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments, but failed to show that you were no longer delinquent, the CRA must show that you're current. l If your file shows an account that belongs only to another person, the CRA must delete it. When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider. Also, if you request, the CRA must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports. Second, in addition to writing to the CRA, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct-that is, if the disputed information is not accurate-the information provider may not use it again. Accurate Negative Information When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years. There are certain exceptions: l Information about criminal convictions may be reported without any time limitation. l Bankruptcy information may be reported for 10 years. l Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit. l Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit. l Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit. Adding Accounts to Your File Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to CRAs: Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don't. If you've been told you were denied credit because of an "insufficient credit file" or "no credit file" and you have accounts with creditors that don't appear in your credit file, ask the CRA to add this information to future reports. Although they are not required to do so, many CRAs will add verifiable accounts for a fee. You should, however, understand that if these creditors do not report to the CRA on a regular basis, these added items will not be updated in your file. For More Information For more information, ask for a free copy of Best Sellers, a complete list of FTC publications. Write: Consumer Response Center, Federal Trade Commission,Washington, D.C. 20580; visit the FTC online at www.ftc.gov; or call 202-FTC-HELP.
