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Stop Debt Collectors

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Written by Dana Neal   
Saturday, 28 July 2007
Article Index
Stop Debt Collectors
Prohibited Practices
Re-Aging of Accounts
Finagling Subscriber Numbers and Account Identifiers
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(Excerpt from BestCredit: How to Win the Credit Game, 2nd ed., Chapter 7)

One of the core elements of successful credit repair is your ability to deal with all types of collectors. After all, they are the ones who will be making many of the decisions regarding you and your account. Considering this, your success will mostly depend on how you handle them. The information in this section is therefore among the most cru­cial in your quest for exemplary credit.

THE FAIR DEBT COLLECTION PRACTICES ACT

The term “collectors” generally refers to those who are collecting for themselves (i.e., original creditors), whereas the term “debt collectors” refers to those who are in the business of collecting for third parties, such as collection agencies and lawyers. This distinction is important where laws about how collectors and debt collectors conduct themselves are concerned, because the FDCPA applies only to debt collectors, not inhouse (creditor) collectors. There are exceptions, however, as certain conduct by creditor collectors can actually bring them under the FDCPA when it would not otherwise apply (see Chapter 14).

A debt collector’s contacts with a debtor are known as “duns,” regardless of the method of contact. Even debt collectors’ dunning letters are governed by the FDCPA, which places tight restrictions on the language they can use. As such, it’s extremely important to know your rights before communicating with debt collectors. Such knowledge will provide the basis for the approach you will take and will give you confidence so that you will not allow yourself to be intimidated.

There are two general tests to determine whether a debt collector falls under the FDCPA. One involves the type of collector, and the other involves the type of transaction.

Collectors Covered by the FDCPA

Debt collectors that fall under the FDCPA include the following:1
  • Collection agencies
  • Attorneys who regularly collect debts
  • Creditors using a false name
  • Creditors collecting for another person
  • Repossession and foreclosure companies (if made unlawfully)
  • Suppliers or designers of deceptive forms (forms used in collection)
  • Purchasers of debt after default
  • Credit counselors (for profit)
  • Check guarantee services
  • Third-party collectors collecting for landlords, including attorneys, realty companies, and servicing companies that are collecting rent debts.2 Deceptive eviction notices are also covered by the FDCPA. Many state UDAP laws also apply to abusive landlords and their rent collection conduct.3
Collectors Excluded from the FDCPA

The following types of collectors are generally excluded from the FDCPA:4
  • Creditors who are collecting their own debts
  • Assignees (i.e., service companies, such as car finance companies, that take on the collection role prior to default on mortgages, student loans, rental agreements, utility bills, medical debts, and other consumer transactions)
  • Government employees
  • Business (aka commercial) creditors
  • Nonprofit credit counselors
Transactions Covered by the FDCPA

Debts that fall under the FDCPA include consumer debts where the transaction was for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. The Act does not apply to commercial debts.5 The following are covered by the FDCPA:6
  • Dishonored checks
  • Rent
  • Medical bills
  • Utility bills
  • Insurance bills and claims
  • Student loans
  • Credit cards
  • Condominium fees
  • Attorney fees
  • Judgments
  • Obligations discharged in bankruptcy
  • Other personal debts (e.g., parking tickets, auto loans)

1. NCLC Fair Debt Collection § 4.1 (5th ed. 2004 and 2005 Supp.)
2. Romea v. Heiberger & Associates, 163 F.3d 111 (2d Cir. 1998); Wenrich v. Robert E. Cole, P.C., 2000 U.S. Dist. LEXIS 18687 (E.D. Pa. Dec. 22, 2000); Travieso v. Gutman, Mintz, Baker, & Sonnefeldt, P.C., 1995 U.S. Dist. LEXIS (E.D.N.Y. 1995).
3. NCLC Fair Debt Collection § 1.5.2.1 (5th ed. 2004 and 2005 Supp.). See NCLC Unfair and Deceptive Acts and Practices §§ 2.2.2, 2.2.5 (6th ed. 2004).
4. NCLC Fair Debt Collection § 4.1 (5th ed. 2004 and 2005 Supp.)
5. 15 U.S.C. § 1692a(5).
6. NCLC Fair Debt Collection § 4.4.2.2 (5th ed. 2004 and 2005 Supp.).


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