Understanding who and for what debts the FDCPA applies, Exemption for the original creditor
The most important misunderstanding that occurs is that consumers send a "cease and desist letter" to the original creditor of a debt or on a collection that is not subject to the FDCPA. Except in rare instances, creditors are not subject to the FDCPA and even the Rosenthal FDCPA excludes creditors from having to comply with 1692g, which contains the cease and desist rules. There are also many types of debts that are not subject to the FDCPA. A debt subject to the FDCPA must have been incurred in a transaction primarily for personal, family, or household purposes. Courts have said that the collection of taxes, fines, child support, civil shoplifting claims, and torts are not subject to the FDCPA, because there was not consensual transaction involved. Perhaps Congress or some courts will change these more narrow interpretations, but that's the dominant view.
Limited Impact of the Cease Communications Letter
If the consumer sends a "cease communications" letter to the debt collector on a debt that is subject to the FDCPA, the collector must cease communicating on the debt. Thus, they may either sell the debt to another debt collector, which starts the process all over again, or sue the consumer in Court to enforce the debt. Many consumers are not prepared to engage the collector's lawyers in court. In California, if the debt has been in default more than four years since the date of last payment, the debt is barred by the California statute of limitations, and the California courts will not enforce it. There are other limitation periods that may be even shorter. Indeed, the FDCPA prohibits a debt collector from filing or threatening to file a lawsuit on a time-barred debt. This may require careful analysis of the documents. Payments or written promises to pay the debt may revive the limitations period.
Send a Letter Disputing The Debt, Free Sample Letters are on My Web Site
The better approach, in my opinion, is to promptly (within 30 days of receiving the initial notice from the collector) dispute the debt or, if there is no valid dispute available, to send the debt collector a written request to validate the debt. So, mark your calendar and the envelope (which you should save) to document when you received the letter by mail. If the consumer disputes the debt or asks for validation from the debt collector within 30 days of receipt, the debt collector must cease collection of the debt until it mails a written notice that verifies the debt. Unlike a "cease and desist letter," the debt collector may not sue the consumer or sell the account to another debt collector, as these acts constitute collection of the debt. Until they verify the debt in writing, they must stop everything (even credit reporting), under 15 U.S.C. A? 1692g(b). Unfortunately, the standard for validating the debt is so low, that Congress should amend this section of the FDCPA.
Beware of letters suggested by non-lawyer web sites
One final caveat: Anyone can start a web site and put in it anything that they want, no matter how incorrect. There are lots of web sites by non-lawyers who suggest a certain approach to debt collection harassment. Maybe they have read the FDCPA, maybe not, but their advice should be taken with a grain of salt, particularly the form letters that are two or three pages long, with numerous citations to the Act and demands for proof. Please don't send those form letters. If you need to go to court for collection harassment or credit reporting violations, these letters may become a hindrance to your case. My web site has several FREE letters, covering most situations. I would be happy to help any individual consumer who needs my assistance to shape my standard letters to suit your specific needs. Please ask for help through my Avvo profile, as it may save you time and frustration.
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