Federal Debt Collection Practices Act. CPA Exam REG

Описание: In this video, I explain the Federal Debt Collection Practices Act as covered on the CPA exam.
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The Federal Fair Debt Collection Practices Act (FDCPA) is a U.S. law that sets standards for the collection of consumer debts, specifically targeting the practices of debt collection agencies. It's important to note that this Act doesn't apply to creditors collecting their own debts, but rather to agencies that collect debts on behalf of others. Here are some key provisions and examples:

Limitations on Contacting Third Parties: Collection agencies are restricted in their ability to contact third parties, like a debtor's relatives. The aim is to prevent indirect pressure on the debtor. For example, an agency can call a debtor's friend to find out the debtor's address, but they cannot reveal they are a collection agency or mention the debt.

Time Restrictions for Contacting Debtors: Agencies must contact debtors at reasonable times. Typically, this means between 8 a.m. and 9 p.m. So, a call from an agency at 11 p.m. would be a violation of the FDCPA.

Representation by an Attorney: If a debtor is represented by an attorney, the collection agency must communicate with the attorney instead of directly with the debtor. An example of a violation would be if an agency continues to call a debtor even after being informed that the debtor has legal representation.

Prohibition of Harassing or Abusive Language: Collection agencies are forbidden from using threatening or abusive language. For instance, threatening physical harm or using derogatory terms would be a clear breach of this rule.

False or Misleading Claims: Making untrue statements or misleading the debtor is prohibited. For example, an agency falsely claiming they can imprison a debtor for non-payment is violating the FDCPA.

Contact at Work: Agencies are not allowed to contact debtors at their place of employment if the employer disapproves. If a debtor's employer has communicated that such calls are unwelcome, any further calls to the workplace by the collection agency would be against the FDCPA.

Understanding these provisions helps protect consumers from unfair debt collection practices and ensures that collection agencies operate within legal and ethical boundaries.

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