What everyone should know about the Fair Debt Collection Practices Act

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act 15 U.S.C. § 1692 is a statute created in 1978 to protect the rights of debtors from unscrupulous practices in the debt collection industry whilst balancing the rights of genuine creditors to get their funds from delinquent customers or others who seek to escape their obligation of payment for goods and services rendered.

The Act has two main areas of regulation which include ‘Prohibited conduct’ and ‘Required Conduct’. Prohibited conduct includes “abusive and deceptive” conduct when attempting to collect debts, such as hours for phone contact, failure to cease communication upon request, causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously, or Contacting consumer known to be represented by an attorney and others. In terms of required conduct, the FDCPA requires debt collectors to, for example, identify themselves and notify the consumer, give the name and address of the original creditor and notify the consumer of their right to dispute the debt, and other rights. The act is enforced by the Federal Trade Commission.

Does it apply in Australia?

No

Do We have an equivalent in Australia?

Yes, many elements of the Consumer Credit Code which has been enacted originally in Queensland and then adopted in NSW, Victoria and other Australian States has very similar provisions to its cousin in the United States. Also the commonwealth laws like the Trade Pratices Act 1972 (Cth) and the state legislation such as the NSW Fair Trading Act have elements of fair dealing in business which makes intimidation, harassment and other unethical forms of debt collection illegal. Also, elements of the common law in Australia have requirements for fair dealing such as the unconscionability doctrine in contract law which prevents parties from taking advantage from one another where one party has significantly more bargaining power than the other or there is a ’special disadvantage’ of one party which makes it unconscionable for the stronger party to enforce the contract.

Debt Collection Letter Resources