Personal Finance Tip of the Day

The primary federal law regulating debt collectors is the Fair Debt Collections Practices Act. This law imposes obligations and standards of conduct upon those who collect debts. This 1977 law amended the Consumer Credit Protection Act to prohibit certain conduct by "debt collectors." The U.S. Congress noted the purpose of the law in its findings: "There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy."

The Fair Debt Collection Practices Act provides that debt collectors cannot contact consumers "at any unusual time or place known or which should be known to be inconvenient to the consumer." It establishes as a default rule that debtors should confine their debt calls to between 8:00 AM and 9:00 PM. Debt collectors can call a person if they have "the prior consent of the consumer."

The debt collector also cannot contact a consumer at the person's place of employment "if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication." Debt collectors also should not contact a consumer if they know or have reason to know that the debtor is represented by an attorney with respect to that debt.

The law prohibits the "the threat of use of violence," "use of obscene or profane language," the publication of a list of consumers who refuse to pay debts and repeated ringing of a consumer's telephone "with the intent to annoy, abuse, or harass any person at the called number." The law also prohibits telephone calls without disclosing the identity of the caller.