The Fair Debt Collection Practices Act (“FDCPA”) was established to eliminate abusive debt collection practices by debt collectors, to ensure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.  This Act is very comprehensive; thus, we have created this reference tool for you. It is important to realize that when you turn collection matters over to an agent to collect for you, you are liable for the acts of your agent.

We further set out the law in North Carolina governing debt collection.  NOTE:  Be aware that the FDCPA governs collectors of third party debt, where the North Carolina laws also govern collection efforts for your own debt.  Also, know that North Carolina law prohibits wage garnishment but for tax debt, child support and student loans.

FDCPA

You Are a Debt Collector if:

1. Your principal business is collecting debts, i.e. a collection agency.

2. You regularly collect debts owed to someone else.  This also applies to a collection agency or a law firm that regularly collects debts.

3. You are a creditor that uses false names when collecting from debtors.

The Kind of Debt Covered by the FDCPA

Consumer, household debt, including, but not limited to, mortgage debt, credit card debt, dishonored checks, condominium fees, rent, medical bills, and student loans.

Things You Cannot Do Under This Act

1. Contact the consumer at inconvenient times.  Specifically, 9:00p.m. to 8:00a.m.

2. Contact a consumer whom you know is represented by an attorney.

3. Contact a consumer at their workplace unless you have their permission or the permission under a court order.

4. Be vague when trying to get information about a consumer’s location from someone else. 

5. Be harassing, oppressive, or abusive.

6. Employ false, deceptive, or misleading representations and collection methods.

7. Falsely imply an affiliation with the government.

8. Falsely represent the character, amount, or legal status of any debt.

9. Falsely represent the services they have rendered or the compensation to which they are entitled.

10. Falsely imply that a person is an attorney or that the communication is coming from an attorney.

11. Threaten unlawful or unintended action.

Defenses that Debt Collectors have against Debtors

1. A Debt Collector may win attorney’s fees if he can prove that the FDCPA suit was brought to harass the collector.

2. The debt collector is not liable if he shows that he violated the statute unintentionally.

North Carolina Debt Collection Practices Regulations

North Carolina law also regulates debt collection.  It is imperative to understand that the North Carolina laws apply not only to debt collection agencies but to “any person engaging, directly or indirectly, in debt collection from a consumer.”  A “consumer” is “any natural person who has incurred a debt or alleged debt for personal, family, household, or agricultural purposes.”

The Top Five Things Not to Do under the North Carolina statute:

1. Do not threaten or coerce a consumer in order to try and collect debt. This includes:

• Using or threatening violence;

• Falsely accusing or threatening to accuse any person of fraud or any crime;

• Making or threatening to make false accusation to another person;

• Threatening to sell or assign the debt.

2.  Do not harass or abuse any person in attempt to collect the debt.  This includes:

• Using profane language;

• Calling the person who owes the debt without fully identifying yourself and your employer;

• Calling the person who owes the debt incessantly or harassing them before or after normal waking hours;

• Calling a person at his place of employment unless he does not have a telephone where he can be reached after his working hours.

3. Do not unreasonably publicize information about a consumer’s debt.  Unless:

• You have written permission of the debtor or his attorney.

• ou are talking with people employed by the debt collector; or a spouse of the debtor.

4. Do not attempt to collect a debt by fraudulent or deceptive representation.  This includes:

• Using a false name to communicate with the consumer;

• Neglecting to tell the consumer that you are calling for the purpose of collecting a debt.

5. Do not attempt to collect debt by use of unconscionable means.  These include:

• Communicating with a consumer even though you have been notified of the consumer’s attorney;

• Bringing a lawsuit against the debtor in a county other than the one where they live or where the debt was incurred.    

Final Note:  Remember North Carolina law does not permit wage garnishment for debt within North Carolina except for child support, tax debt or student loan debt.

If you have any questions regarding this article, please contact Anna Gorman at 704.342.5276 or agorman@poynerspruill.com or Judy Thompson at 704.342.5299 or jthompson@poynerspruill.com.