Under the Federal Trade Commission's Fair Debt Collection Practices Act, collection agencies may not use any false, deceptive, or misleading representations or means to collect debts. They may not harass, oppress, or abuse any person while attempting to collect a debt. A debtor may be contacted between 8 a.m. and 9 p.m. only and can be contacted at work unless instructed not to. If a consumer does not wish to be contacted by a collection agency via phone, he must state so by contacting the company in writing within thirty days. After doing so, the collector cannot call the consumer again.
Collectors may not tell others about the debtor's personal finances. They are also not required to tell the consumer when they sell his or her account, so there is likelihood for a person to be contacted by a different collection agency regarding the same debt and having to dispute it all over again.
Additionally, many debts have a statute of limitations, meaning they eventually expire and can be brought up as having passed their statute of limitations as a defense if the collector takes the alleged debtor to court and tries to sue him. Most of these time-barred debts expire between 4 to 6 years after going into default, with individual states having their own legislation regarding the exact amount of time. According to the Federal Trade Commission, however, the Fair Debt Collection Practices Act does not prohibit debt collectors from trying to collect barred debts, as long as they do not sue or threaten to sue the consumer for the debt.
It also must be kept in mind that not all debts have a statue of limitations. For instance, there is NO statute of limitations on federal student loans, most types of fines, past due child support, taxes in most cases, as well as on reporting the account to credit bureaus. The statute of limitations again depends on the type of debt and the given state's civil debt collection codes.
Consumers should likewise be aware that even after a debt reaches its statute of limitations, if the consumer makes any payment on the debt or signs a promissory note, this may reset or restart the statute of limitations. That is why it is crucial to make sure that the alleged debit is valid before making any payment. This stipulation differs from state to state, and by paying any amount of money it may renew a debt.
When confronted with questionable debt, consumers should verify their state's statutes of limitations, write a dispute letter to the collection agency within 30 days of receiving the first collection notice, keep accurate records of all correspondence, and report any violations to their state attorney general, the FTC, and BBB.