The Fair Debt Collection Practices Act (FDCPA) is a federal law (15 U.S.C. § 1692 et seq.) that regulates debt collectors and even attorneys acting as collectors (debt collectors are third parties attempting to collect a debt- parties collecting their own debts are not normally covered by the FDCPA but are often covered under state laws). (Iowa Code 537.7103). The FDCPA covers personal, family, and household debts, but not business debts. Consumers have rights under the FDCPA and under state laws against unfair or illegal debt collection activities.
The following are prohibited activities by third party debt collectors:
1. Contacting a third party about your debt (except in an attempt to locate you—they cannot ask to pass a message to you to pay the debt).
2. Identifying as a debt collection company to a third party unless asked.
3. Disclose to a third party that a debt is owed (including spouse, employer, or neighbor)
4. Communicate with a third party more than once.
5. Communicate with you at inconvenient times or places such as at work if the employer does not allow it, or before 8:00 a.m. or after 9 p.m.
6. Communicate with you at work after being told not to contact you there.
7. Communicate with you after receiving a letter telling them that the collector must cease and desist all communications or that you refuse to pay the debt allegedly owed except to notify the consumer that efforts are being terminated, notify that specified remedies are being undertaken, or invoking a specified remedy.
8. Communicate with you after being advised that the consumer is represented by an attorney. They can only contact the attorney unless the attorney fails to respond within a reasonable amount of time.
9. Harass, or use oppressive or abusive conduct or obscene or profane language. The collector cannot use threats of violence or harm to person, property or reputation, threats of arrest, or even call without identifying themselves.
10. Threaten violence, criminal prosecution, or identify themselves as law enforcement or as an attorney (unless the company is a law firm).
11. Cause the telephone to ring repeatedly or continuously.
12. Use false, deceptive, or misleading representations about the company, the debt, implying that arrest or imprisonment would result, or seizure, garnishment, attachment, or sale of property would occur, threaten action that cannot legally be taken, represent that you have committed a crime, or threaten to communicate false credit information. Collectors cannot use false statements.
13. Use unfair or unconscionable means to collect a debt including attempting to collect an amount not authorized in the contract, threatening to deposit postdated check prior to date, or taking property not authorized to do so.
14. Force payment of debt prior to 30 day right to dispute period ending.
15. Sue except in county signed contract, residence or owning property subject to debt.
16. Cannot collect after a debt is discharged in bankruptcy or attempt to get the debt reaffirmed after bankruptcy.
17. Sell debt to another company to extend statute of limitations.
18. Contact Homeland Security about alien status.
19. Threaten imprisonment or criminal prosecution.
20. Evict, lockout, or seize property without utilizing state procedures.
21. Threaten to sue where no suit can be made (such as no authority to sue).
22. Imply that the company has multiple persons working on collection, when the company does not have.
23. Collect or sue for collection costs, attorney fees, or interest when the original agreement does not provide for such.
24. Threaten to turn the account over to the legal department or an attorney. In fact legal letters must be reviewed by a lawyer so check for a handwritten signature.
25. "Recommend litigation" if not settled or state that "will suggest legal action."
A debt collector must:
1. Provide required notices in either the initial communication or in writing within 5 days after the initial communication. Within the 5 days of the initial communication unless provided earlier or the consumer paid the debt, the collector must send a written notice containing the amount of debt; name of the creditor; a statement that unless the consumer within 30 days after receipt of notice, disputes the validity, the debt will be assumed to be valid; that if the debt is disputed within the 30 day period, the debt collector will obtain verification of the debt and a copy mailed to the consumer; and that upon consumer’s written request within the 30 day period, the collector will provide the consumer with the name and address of the original creditor if different from the current creditor.
The debt must be validated by the debt collector, otherwise it cannot be collected. In fact, the creditor may be prohibited from collecting on the debt if the collector fails to validate the debt. Thus, it is important not to ignore the 30 day notice letter (otherwise the debt is assumed to be valid). The collector must validate the debt with the creditor and provide a written copy back to the consumer. Prior to the validation, no enforcement efforts can be made, including stopping lawsuits.
2. Notify you in the initial communication that the communication “is an attempt to collect a debt and any information obtained would be used for that purpose.”
3. Notify you that the communication is from a debt collector during each contact.
4. Disclose caller’s individual identity in every telephone call.
5. Report to a credit bureau that the debt is disputed
You are not required to:
1. Discuss anything with a collector.
2. Answer a collector's phone call.
3. Speak with a collector if you answer the call.
4. Answer any questions asked by the collector.
5. Say goodbye to the collector.
6. Be truthful about any fianancial or private information, in fact do not discuss any private or financial information.
7. Acknowledge the debt. By acknowledging the debt or partially paying the debt, you can extend the time of the statute of limitations (6 years oral, 10 years written contract in Iowa).
Intentional violations of the FDCPA by a debt collector allow the consumer to file a lawsuit against the debt collector in federal court allowing for the recovery of actual damages, statutory damages of up to $1000 and attorney fees and costs. Class Action lawsuits are also authorized. The standard is the Least Sophisticated Consumer Standard, so it does not matter if you believe the threats, only that the least sophisticated consumer would believe them. Actual damages include (must be proven but not necessarily by medical records):
1. Heart problems such as heart attacks, angina, or chest constrictions
2. Pregnancy issues such as miscarriages or other problems
3. Disgestive problems such as ulcers or flare-ups
4. Shock
5. Eating problems such as loss of appetite.
6. Emotional issues such as crying, emotional paralysis
7. Sleeping problems such as nightmares, insomnia, night sweats
8. Head problems such as inability to think, headaches, migraines.
9. Breathing problems such as shortness of breath
10. Anxiety, nervousness, fear, hysteria
11. Hypertension
12. Stress to you, spouse, and children
13. Irritability
14. Embarrassment, humiliation, indignation, pain and suffering
Monetary damages include:
1. Payment of a debt barred by the statute of limitations
2. Taking property illegally or returning property that consumer didn't need to return
3. Telephone calls
4. Attorneys fees.
Damages for intentional infliction of emotional distress (must be outrageous conduct).
Cases under the FDCPA may be brought in any court of competent jurisdiction. Thus cases can be brought in small claims courts, but it is usually better to bring a case in federal court (as the court is often more familiar with the statute).
Willful and knowing violations of prohibited acts under Iowa Code 537.7103 are serious misdemeanors under Iowa Code 537.5301 Additionally, the State Attorney General can be notified of violations, and if the debt collector is out-of-state, the Federal Trade Commission can be notified (Federal Trade Commission, One Bowling Green Ste. 318, NY, NY 10004, 1-877-382-4357).
Consumer Debt Collection Laws:
Fair Credit Billing Act. 15 U.S.C. 1666
Garnishment Restrictions:
Federal: 15 U.S.C. 1671-1677 and 29 C.F.R. pts 870.1-.57
Iowa: Iowa Code 537.5104-.5105, 642.1-.24, 627.6
Fair Debt Collection Practices Act. 15 U.S.C. 1692
Iowa Debt Collection Practices Act. Iowa Code 637.7101-.7103
Federal Claims Collection Act. 31 U.S.C. 3701, 3711 et seq.
Iowa right to cure past consumer credit debts. Iowa Code 537.5110-.5111
Iowa repossession rules. Iowa Code 537.5103, 554.9101-.9507
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