The Fair Debt Collection Practices Act

The objective of this article is to assist Landlords, Property Managers, and Tenants in understanding their obligations and/or rights when it comes to debt collection to better protect themselves.

The Fair Debt Collection Practices Act (FDCPA) was established in 1977 as an amendment to the Consumer Credit Protection Act as Title VIII of that act. It establishes legal protection from abusive debt collection practices.

Purpose of the FDCPA:

• Eliminate abusive practices in the collection of consumer debts
• Promote fair debt collection
• Provide consumers with an avenue for disputing and obtaining validation of debt information to ensure that information’s accuracy
• Establish guidelines under which debt collectors may conduct business
• Define Rights of the consumers involved with debt collector
• Establish penalties and remedies for violations of the Act.

Requirements for Debt Collectors:

• Identify themselves and notify consumer
• Identify the name and address of the original creditor
• Notify consumer of their right to dispute the debt
• Provide verification of the debt
• File lawsuit in proper venue.

Prohibited Conduct when Collecting Debt:

• Contact via Telephone: Outside the hours of 8:00AM – 9:00PM
• Failure to cease communication upon request: If consumer provides written notice from consumer requesting no further communication than debt collector may only communicate via litigation
• Constantly calling or engaging the consumer in telephone communications
• Communicating with consumer at their place of employment
• Contacting a consumer known to be represented by an Attorney
• Communicating with consumer after request for validation has been made
• Misrepresentation or deceit
• Publishing the consumer’s name or address
• Seeking unjustified amounts
• Threatening arrest or legal action
• Abusive or profane language
• Communicating and Revealing consumer’s information with third-parties
• Embarrassing consumer
• Reporting false information on a consumer’s credit report.

Prohibited Practices:

• Claiming to be an Attorney or Government employee when you are not
• Sending documents that look like legal papers when they are not
• Stating that forms sent are not legal documents when they are
• Accusing someone of committing a crime due to debt
• Stating that it will garnish wages or sell your property if it is not legal to do that
• Claiming collector will sue if collector has no intention of suing
• Not being truthful about the amount of money you owe
• Claiming the consumer will be arrested if consumer does not pay the debt
• Threatening consumer with violence.

How it applied to Landlord’s and Property Managers:

As a Property Manager, you are acting as a third-party on behalf of the owner to collect debt.

• Do not telephone the Tenant to collect delinquent amounts owed.
• When issuing notices, always place notices in a plain envelope with only the Tenants name and address displaying. Never indicate it is an invoice, notice, etc.
• Always follow the guidelines for proper procedures as set forth in the Fair Debt Collection Practices Act.

Summary

Debt Collectors must follow guidelines and proper procedure when it comes to collecting debt.

Landlord’s and Property Manager’s must follow guidelines and proper procedure when it comes to collecting debt.

Tenant’s should be aware of these guidelines and proper procedures to protect themselves.

Landlords
As a Landlord, you must understand what lengths you can go to to collect unpaid rent, fees, etc., If you overstep, you can be liable. It is strongly recommended that you hire a professional to handle this matter, whether a property manager or connect with a debt collection agency. Some are paid a % based on what they collect while others collect a fee upfront.

Property Managers
As a Property Manager, you will be able to get a favorable agreement with a debt collection agency which will provide your clients with favorable terms.

Tenants
As a Tenant, it is in your best interest to review the Requirements for Debt Collectors, Prohibited Conduct when Collecting Debt, & Prohibited Practices listed above. We strongly recommend leaving any rental not owing rent.