Debt can be a heavy burden for many individuals, and dealing with creditors can often exacerbate stress and anxiety. While creditors have the legal right to collect debts, certain practices are prohibited to protect consumers from harassment. Many states have enacted additional regulations aimed at preventing creditor harassment, ensuring that individuals facing financial difficulties are treated with dignity and respect.
The Fair Debt Collections Practice Act (FDCPA) is federal law that provides a national standard to limit what creditors can do. The FDCPA was last updated in 2010 (15 U.S.C. § 1692). Changes in technology, communication methods, and creditor behavior have driven states enact their own restrictions.
Attorney Mathew Higbee, who represents people struggling with debt, says that the state laws complement federals laws, and in many cases, provide greater protections. “The FDCPA is a good starting point, but many states, in particular California and Florida, have added strong additional levels of protections,” says Higbee. These regulations complement federal laws, such as the Fair Debt Collection Practices Act (FDCPA), but often offer additional protections tailored to the specific needs of each state’s residents.
The Role of State Regulations in Debt Collection
State laws vary in their approach to regulating debt collection, but the core goal is consistent: to prevent creditors and debt collectors from using abusive, unfair, or deceptive tactics to recover money. Many states have implemented their own versions of the FDCPA, and some go beyond what the federal law mandates. These regulations are designed to protect individuals from being overwhelmed by debt collection practices that can be emotionally and psychologically harmful.
Common Provisions in State Debt Collection Laws
1. Limits on Contact Frequency
State laws often impose restrictions on how often a creditor or debt collector can contact a debtor. These laws are designed to prevent harassment through repeated calls, letters, or other communications. For example, many states require that creditors and collection agencies can only contact debtors during certain hours, such as between 8 a.m. and 9 p.m. They may also limit the number of times they can contact a debtor in a specific period.
2. Prohibition of Threats and Intimidation
Many states impose laws that prevent debt collectors from using threats of violence, legal action, or public shaming to pressure individuals into paying debts. For example, it is illegal for collectors to threaten to garnish wages or seize property unless they are legally entitled to do so. Additionally, harassing or intimidating language, such as claiming that the debtor will be arrested or jailed, is prohibited.
3. Restrictions on Contacting Third Parties
State regulations may limit the ability of creditors or collection agencies to discuss a debtor’s financial situation with third parties, such as family members, friends, or employers, unless the debtor has given explicit consent. This provision helps protect the debtor’s privacy and prevents unnecessary embarrassment.
4. Right to Dispute and Request Validation
Many states afford consumers the right to dispute debts and request validation of the debt in question. If a debtor believes they do not owe the debt or the amount is inaccurate, state regulations often give them the right to request proof of the debt. Creditors or collectors must then stop further collection efforts until they provide verification. This regulation prevents consumers from being forced to pay debts that they don’t owe or cannot verify.
5. Prohibition of Harassing Behavior
Harassment takes many forms, from excessive phone calls to deceptive tactics designed to confuse the debtor. State laws typically prohibit the use of abusive language, calling at odd hours, or using misleading practices to trick individuals into paying more than they owe. Some states even have “cease and desist” laws, which allow consumers to stop creditors or debt collectors from contacting them after the debtor requests it in writing.
6. Legal Remedies and Penalties for Violations
If a creditor or debt collector violates state regulations, consumers often have the right to take legal action. State laws provide remedies such as monetary damages for harassment, emotional distress, or other violations of the law. These remedies act as a deterrent to creditors and collectors who might otherwise take advantage of vulnerable individuals. In some states, consumers may also be able to report harassment to regulatory authorities, which can investigate and impose penalties on offending companies.
Examples of State-Specific Regulations
1. California
California has enacted one of the most comprehensive sets of state debt collection regulations. The Rosenthal Fair Debt Collection Practices Act mirrors the federal FDCPA but provides additional protections, including a provision that prohibits creditors from using deceitful tactics such as falsifying documents. California also limits the hours during which creditors can contact consumers and mandates that any communication with the consumer about a debt must be in writing if requested.
2. New York
New York’s Debt Collection Procedures Law prohibits creditors and collectors from using deceptive or misleading statements, and it requires them to provide debtors with specific information about the debt, including the original creditor’s name and the total amount owed. Additionally, New York allows consumers to request written proof of the debt and provides remedies for violations.
3. Texas
In Texas, the Texas Debt Collection Act aligns closely with the FDCPA but includes additional consumer protections. Notably, it allows consumers to file complaints with the state’s Office of Consumer Credit Commissioner if they believe their rights have been violated. Texas law also provides debtors with an opportunity to object to wage garnishments or other actions taken by creditors.
4. Florida
Florida has unique provisions in place to protect consumers from debt collection abuse. The state’s Consumer Collection Practices Act (Title XXXIII Chapter 559) prohibits creditors from using threats or intimidation and mandates that debt collectors refrain from calling consumers’ workplaces if they have been informed that the debtor is not allowed to receive personal calls during work hours. Florida also protects residents from having their wages garnished until all legal avenues are exhausted.
How Consumers Can Protect Themselves
While state regulations provide robust protections, it is essential for consumers to be aware of their rights. If you are being harassed by creditors, here are a few steps you can take:
· Keep Records: Document every contact you have with creditors, including phone calls, letters, and messages.
· Send a Cease and Desist Letter: If you want to stop contact from a debt collector, send them a written request to cease communication.
· Request Validation: If you believe a debt is incorrect or fraudulent, ask the collector to validate it in writing.
· Know Your Rights: Familiarize yourself with both federal and state laws that protect you from debt collection harassment.
· Seek Legal Assistance: If harassment persists, consult with an attorney who specializes in consumer protection laws to explore your options for holding the creditor accountable.
What To Do If A Creditor Is Harassing You
The good news for debtors is that both the state and federal laws provide for the plaintiff (Debtor) to receive an award of attorney’s fees in any action in which the plaintiff is deemed to have won. “This “fee shifting” provision creates a strong incentive for attorneys to take creditor harassment cases on contingency,” says attorney Melissa Clark. This means that most victims of creditor harassment will not have to pay out of pocket to hire an attorney. “So if you believe a debt collector is violating your rights, contact an attorney for a free consultation,” said Clark. “The debt collector might end up paying you or forgiving the debt.”
