FAIR DEBT COLLECTION PRACTICES

Many clients and attorneys have questions about what actions debt collectors can take in New York to collect a debt. The regulation of debt collectors (third parties who are attempting to collect a debt in New York) are governed by a federal law known as the Fair Debt Collection Practices Act (discussed below). The actions of creditors who are attempting to collect a debt in New York State are governed by the New York State Debt Collection Procedures Law (a discussion of that law is beyond the scope of this email)

WHAT IS THE FAIR DEBT COLLECTION PRACTICES ACT?
The Fair Debt Collection Practices Act is federal law which regulates the activities of third parties who regularly collect debts from others.

HOW MAY A DEBT COLLECTOR CONTACT YOU?
A debt collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

MAY A DEBT COLLECTOR CONTACT ANYONE ELSE ABOUT YOUR DEBT?
If you have an attorney, the debt collector must contact your attorney, rather than you. If you do not have an attorney, a debt collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Debt collectors usually are prohibited from contacting such third parties more than once. In most cases, the debt collector may not tell anyone other than you and your attorney that you owe money.

WHAT MUST THE DEBT COLLECTOR TELL YOU ABOUT THE DEBT?
Within 5 days after you are first contacted, the debt collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.


MAY A DEBT COLLECTOR CONTINUE TO CONTACT YOU IF YOU BELIEVE YOU DO NOT OWE MONEY?
A debt collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.


WHAT CAN YOU DO IF YOU BELIEVE A DEBT COLLECTOR VIOLATED THE LAW?
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

WHERE CAN YOU REPORT A DEBT COLLECTOR FOR AN ALLEGED VIOLATION?
If a debt collector violates the law, you may contact the Federal Trade Commission (you can find the address and telephone number in the front of the "white pages" of your local telephone directory under federal government listings). You can file a federal or state lawsuit against the debt collector for violation of the law.

Shenwick & Associates is available to assist all clients with any personal bankruptcy or debtor/creditor issues.

Jim Shenwick