The Fair Debt Collection Practices Act governs actions that bill collectors may and may not take when contacting debtors. As noted on the Federal Trade Commission’s website, collection agents may not call collect, which may result in your paying extra charges for their communications.
If you received a notice of a debt, the debt collector must provide the name of the creditor and amount owed. Collection agents may not increase the debt’s outstanding balance. You may ask an agent to confirm in writing the amount that remains unpaid to the creditor.
The FDCPA prohibits debt collector “convenience fees”
The Consumer Financial Protection Bureau recently affirmed that FDCPA’s Section 808 forbids bill collectors from adding “pay-to-pay” charges when debtors make payments. A collection agency may not ask you to pay a bill on its website and then add a “convenience” fee when you click to check out. The FDCPA also prohibits bill collectors from adding fees when paying by phone.
According to ConsumerFinance.gov, additional charges not addressed in a creditor’s contract violate federal law. Collection agents may not include fees not described in the terms of a debtor’s original loan. If you find charges that appear unrelated to your debt’s balance, you could refer to your loan documents to verify that the creditor had permission to include them.
Borrowers may file a legal action for relief
Third-party debt collection agents often purchase outstanding bills from consumers’ original creditors. If a third party violates the FDCPA, however, borrowers may file a legal action against them for relief.
Unlawful collection practices include coercing debtors into taking action they would not have taken but for the bill collector’s threats or false statements. Collectors may not, for instance, mislead you into believing that an online convenience fee helps pay down your debt faster than sending them a check.