Consumer Debt Collections FAQs
1. What is the Fair Debt Collection Practices Act?
The Fair Debt Collection Practices Act (FDCPA), codified at 15 U.S.C. § 1692 –1692p, approved on September 20, 1977 (and as subsequently amended), is a consumer protection amendment, establishing legal protection from abusive debt collection practices. The FDCPA works in concert with the Consumer Credit Protection Act, as Title VIII of that Act.
2. What debt collectors are covered by the Act?
The Act regulates the conduct of debt collectors: any person who regularly collects debts owed to others. This definition includes lawyers who perform debt collection services on a regular basis. Even where money is legitimately owed, a debt collector’s conduct is restricted by this law.
3. What is “consumer debt”?
Consumer debt is any debt incurred for personal, family, or household purposes.
4. What restrictions are imposed on collection agencies by the FDCPA?
The FDCPA restricts consumer debt collection agents from engaging in conduct including the following:
- Contacting a third party who does not owe the debt, such as a relative, neighbor or your employer. Co-signers to the debt, however, may be contacted by the debt collector.
- Threatening to refer your account to an attorney, harm your credit rating, repossession or garnishment, without actual intention of acting on the threat.
- Making repeated telephone calls or telephone calls at unreasonable times. The Act defines unreasonable times as contact before 8:00 am or after 9:00 pm.
- Placing telephone calls to an inconvenient place, such as work in violation of a policy by your employer that is known to the debt collector or following a request by you that they do not contact you at work.
- When placing a telephone call to you at work, inform your employer of the purpose of the call, unless first asked by the employer.
- Using obscenity, racial slurs or insults.
- Sending letters that appear to have come from a court.
- Seeking collection fees or interest charges not permitted by your contract or by state law.
- Making false representations in association with consumer debt collection to collect the debt, including the false claim that the person contacting you in relation to the debt is an attorney, falsely claiming to have started a lawsuit, using a false name or using stationery that is designed to look like an official court or government communication.
- Using false claims to collect information about the debtor, such as pretending to be conducting a survey.
- Threatening you with arrest if you do not pay the debt.
5. What is a fraudulent transfer?
A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation with intent to hinder, delay or defraud any creditor of the debtor.
6. What is successor liability?
When a corporation purchases the assets of another corporation, it may become liable for the old corporation’s debts if the transfer was done for the purpose of defrauding creditors or if the purchasing corporation is a mere continuation of the seller and has some of the same shareholders, directors, and officers. Bryan v. Adams, 116 N.C. App. 448, 448 S.E.2d 832 (1994). A mere continuation is defined as inadequate consideration or lack of a good faith purchase.
If you are involved in a consumer debt collection matter that may require the assistance of debt collection lawyers, please contact the lawyers at Hannah Sheridan & Cochran, LLP, at 919-859-6840.