The Federal Trade Commission is the United States' consumer protection agency. Its duties include enforcing the Fair Debt Collection Practices Act for Ohio consumers as well as consumers throughout the country. This law makes it illegal for debt collectors to use abusive or unfair methods to collect on debt owed by consumers.
It also prohibits such methods when collecting a debt that the collector alleges a consumer owes when that consumer does not. As such, a mistake as to who to collect from or who is the debtor does not excuse the behavior.
Law prohibits some collections activities
Some of the tactics that are illegal include:
- Harassing the apparent debtor or third parties, including excessive phone calls
- Lying about being an attorney or that papers sent are legal forms
- Misrepresenting amount owed or adding fees the debtor does not owe
- Threatening arrest or suggesting the debtor committed a crime if the debtor has not
- Threatening other acts, like garnishment or suit, if not legally possible or not intended
Some debt collectors are subject to FDCPA
Under the FDCPA, however, not all people trying to collect a debt have to abide by this law in their activities. Only those defined as a debt collector under this Act must comply with the law in their collections behaviors. This includes a person who regularly collects debts owed to others, such as the following collection agencies and lawyers who collect debt as a practice. It also includes junk debt buying companies that then seek to collect on that debt.
Not all debt collectors fall under FDCPA
However, not all entities or people regularly involved in collecting a debt are debt collectors under the FDCPA. Those not covered include those collecting the following:
- Debts for companies with common ownership
- Their own debts under their own company name
- Debts they created but then sold, if it is still servicing the loan
- Debts that were good when obtained but later went into default
- Debts that were security for a commercial transaction
Legal process servers are also exempt from the FDCPA's definition of a debt collector.