WHAT DOES THE “FAIR DEBT COLLECTION PRACTICES ACT” SAY ABOUT THIS?
To start, there are both a federal Fair Debt Collection Practices Act (FDCPA) and a California one (CFDCPA). They both prohibit abusive, deceptive, and unfair methods of collecting debts. Neither eliminates debts like bankruptcy does, but instead these laws protect you from inappropriate collection behavior. In practice, if a creditor violates one of these sets of laws, you may be able to use that as leverage to settle the debt on much better terms.
Creditors and collectors in California have to comply with both the federal and state set of debt collection laws. The California version adds some important extra protections for residents of this state.
Most importantly, the federal law applies only to debt collectors collecting on others’ behalf, while the California one also covers original creditors collecting on their own behalf.
Both laws have a lot to say about how you are allowed to be contacted in the collection process. (Because there is a lot of overlap between them, to keep things simpler here I won’t specify which of the two is providing the indicated protection.)
TO WHAT EXTENT CAN CREDITORS AND COLLECTORS LEGALLY THREATEN OR HARASS ME?
- Threaten to have you arrested or to have your assets or wages grabbed, unless BOTH it’s legal to do so, AND they actually intend to take the threatened action. (Grounds for arrest are extremely rare, and seizure of assets and garnishment of wages are almost never done except after a judgment is entered.)
- Accuse you of committing a crime for not paying a debt, unless it’s true (extremely rare).
- Use physical force, or threaten to do so, against you or your property.
- Threaten to harm your reputation, or in fact do so by defaming you to others.
- Contact you at inconvenient times, generally before 8 AM and after 9 PM, or other times known to be bad for you.
- Call you repeatedly, although what crosses the line in unclear—daily would probably not be seen as harassment, while multiple calls in one day could be, especially if you asked for the calls to stop and/or the calls were at inconvenient times.
WHAT SPECIFIC FORMS OF LYING BY CREDITORS AND COLLECTORS ARE ILLEGAL?
- Misrepresent who they are, including tricking you into calling them back.
- Say they are going to assign the debt in a way that you would lose defenses to the debt.
- Pretend they are an attorney or law firm when they are not.
- Say they are going to sue you when they don’t actually plan to do so.
- Pretend they are a credit reporting agency, or say they will report to a credit reporting agency when they don’t actually intend to.
- Represent that they will add collection and/or attorney fees to the debt when not legally entitled to do so.
- Make it appear that they are acting under government authority when not actually collecting for the government.
- Send paperwork that looks like it is part of a legal process or is from a court when it is not.
WHAT MUST CREDITORS AND COLLECTORS DO IN THEIR COMMUNICATION TO PROTECT MY PRIVACY?
- You cannot be put on a public list of people not paying their bills.
- Their mailed envelopes can have only names and addresses on them, nothing intended to embarrass you or that would reveal its purpose to collect a debt; no postcards.
- Employers can be contacted only to locate you, verify employment, or to garnish wages after judgment is entered.
- Family member cannot be contacted, except your spouse, and except parents if you are a minor, or to locate you.
- While they are allowed to contact third parties—employers, family, whomever—strictly to locate you, in the process they cannot reveal that you owe a debt, nor the name of the company they represent unless asked, and must stop calling for this purpose once informed that you are represented by an attorney.
ARE THERE ANY SPECIAL COMMUNICATION RULES ABOUT ATTORNEYS AND LAWSUITS?
- Once you are represented by an attorney, who has informed your creditors in writing of that fact, the creditors can no longer contact you except to send you billing statements; they CAN resume contacting you if the attorney doesn’t return their calls or refuses to talk with them.
- If you are sued you must be served with a notice of that lawsuit. If the creditor gets a default judgment on that lawsuit, and they did not provide you with proper notice then you can vacate the judgment.
- The only places where a creditor can sue you are the county where you incurred the debt, where you lived when you did so, and where you live now.
The next blog post will be about practical steps that you can take in California to remedy these kinds of creditor violations.