Fair debt collection broadly refers to regulation of the United States debt collection industry at both the federal and state level. At the Federal level, it is primarily governed by the Fair Debt Collection Practices Act (FDCPA). In addition, many U.S. states also have debt collection laws that regulate the credit and collection industry and give consumer debtors protection from abusive and deceptive practices. Many state laws track the language of the FDCPA, so that they are sometimes referred to as mini-FDCPAs.
U.S. state laws on fair debt collection generally fall into two categories: laws which require persons who are collecting debts from consumers to be licensed, registered or bonded in order to collect from consumers in their states, and laws that protect consumers from specific unfair practices by debt collectors, which may include collection agencies and sometimes original creditors. Unlike the FDCPA, many state laws also apply to the debt collection activity of original creditors, thus providing greater protections to consumers than the Federal FDCPA.
Although not all states have such laws, some states track violations of debt collection practices laws. Some states bar debt collectors from engaging in collection activity against residents of the state unless the collection agency has complied with state licensing or bonding requirements, while others exempt out-of-state collectors from those requirements. Many state fair debt collection laws provide for a private right of action (consumers can sue the debt collector) by consumers against debt collectors that violate their provisions.
Examples of prohibitions of unfair practices by collectors include contacting employers after having been given notice not to do so, pretending to be a government agency, pretending to be an attorney or falsely threatening a debtor with a lawsuit.
