What Debt Collectors Can and Can't Do

Debt collectors are like mosquitos. They can be annoying and they’re hard to dissuade. Fortunately, there isn’t a whole lot a debt collector can do besides call you and send you mail. The Fair Debt Collection Practices Act (FDCPA) spells out the actions that a debt collector may and may not undertake in the process of collecting a debt. 

Your state has additional laws that may limit debt collectors even further. It’s worth investigating these laws, so you understand the rules and can play the game accordingly. 

What Debt Collectors can do: 

1.  Call you directly between the hours of 8 am and 9 pm. However, you have the right to request not to be contacted by phone again in the future. This request must be done in writing. You can also insist that the debt collector only contact your attorney instead. 

2.   Contact you via mail. However, it can’t be obvious to someone looking at your mail that the correspondence is from a debt collector. Postcards aren’t permitted, since the nature of the correspondence would be obvious. 

3.  Take you to court. The details are very state specific, but your creditors can certainly take you to court. For smaller debts, this rarely happens. If you had the money, you’d have already paid it. If it you don’t have it, an expensive legal proceeding isn’t worth the effort. 

4.   Request postdated checks. This is allowed under the FDCPA but may not be permitted under your state’s debt collection laws.

5.  Report your payment delinquency to the credit bureaus. Paying your bills on time is an important part of your credit score.

6.  Accept less than the full amount as payment in-full. This can be a great option to get the collection agency off your back. The debt may appear as “settled” on the credit report, which harms your score. You may also have to pay taxes on the amount of the debt that was forgiven. 

Debt collectors must follow the laws provided by the FDCPA and your state of residence. If you owe money, it’s reasonable to expect that your creditor will try to collect that debt. However, there are limitations. Many collection practices are illegal. 

What Debt Collectors Can’t Do: 

1.  Call you on a Sunday. Monday through Saturday is fair game, but even debt collectors have to take a break on Sundays.

2.  Call you after 9 pm or before 8 am. They only way debt collectors can call you outside these hours is with your permission.

3.  Contact your employer. Unless the debt is related to non-payment of child support, your employer is off limits. They also can’t contact you at work if they know you don’t want to be bothered there.

4.  Contact your friends, family, or neighbors regarding your debt. They can, however, contact these people to determine your address or phone number. It cannot be revealed that you owe money.

5.   Use threatening language over the phone. Vulgar language or the threat of prison or loss of reputation isn’t permitted.

6.  Call you repeatedly in a short period of time. This is open to interpretation. But if you’re constantly receiving calls, it can be considered harassment under the FDCPA. You can sue the debt collector in this case.

This is the short list of items that many debt collectors have been known to violate. Familiarize yourself with the FDCPA for additional restrictions. Remember that these rules only apply to debt collectors and not the in-house collection employees of your creditor. See your state laws for additional guidance. 

Debt collectors may be annoying, but they are required to follow the law just like everyone else. Each violation of any of the rules can carry a $1,000 fine and debtors have been very successful collecting these fines in court.