Debt Collection Agency Laws

Debt collection agencies have fairly loose parameters when it comes to collecting debts from those who owe them, however the tactics that can be used within the confines of the laws can vary considerably. The FDCPA or Fair Debt Collection Practices Act was instituted to provide some general structure and code of conduct to debt collection agencies.


1) A debt collector is third person or party who attempts to collect debts owed to another party.
2) A debtor is the person or party who owes a debt.
3) A creditor is a person or party who has loaned or extended credit to another party and to whom a debt is owed.
4) FDCPA is The Fair Debt Collection Practices Act. This is the federal regulation that governs the practice of all collection practices.

Debt Collection Guidelines

The FDCPA does have some basic restrictions to ensure that third party collectors are conducting the practice of debt collection both legally and civilly. According to the FDCPA the following acts are prohibited by debt collectors.

1) Contacting a third party who has no ties to the debt. Debt collectors are able to legally contact co-signers in an attempt to settle debts.
2) Threaten action without intention to follow through. Third party collectors are prohibited from threats to harm credit ratings, pursue legal action or garnish wages unless they have the power or plan to do so.
3) Send letters that appear to have come from a court of law, legal representative or court of law. Debt collectors may not threaten arrest if the debt is not settled or pursue legal action in courts remote from the debtor’s area of residence.
4) Harass the person who owes the debt. Collection agencies may not make repeated phone calls or calls at inconvenient times or to unnecessary numbers such as work or relatives homes. If creditors do contact these places the person owing the debt may request for them to stop or contact your attorney if you have one. Once a request is made of a debt collector to contact your attorney all communication directly with the debtor should stop. Obscenity insults or threats made by debt collectors are never permitted.
5) Falsely representing someone else including an attorney or a government official.
Impersonating another party such as a surveyor in an effort to gain information about the person who owes the debt.
6) Attempting to obtain fees interest or charges not associated with the debt or requesting post dated checks.

The FDCPA governs the practice of debt collection from a federal standpoint. In-house collections such as store credit cards are typically considered a separate entity and may not be covered by these regulations. It is estimated that more than 25 of the 50 states have additional laws beyond those instituted by the FDPCA that govern the practices of debt collection.