Your Rights Under California's Fair Debt Collection Practices Act
This is a general guide and not intended as legal advice.
Responding to Debt Collection Agency.
It is important that you respond as soon as possible: if you don't, the agency may keep trying to reach you to collect what they believe is a valid debt.
State law prohibits debt collectors collecting or attempting to collect a consumer debt by using obscene or profane language (California Civil Code section 1788.11(a)). Federal law states that a "debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person..." and also prohibits the use of obscene or profane language to the hearer or reader (15 United States Code section 1692d(2)).
A collection agency or its employees must not threaten to do anything that it cannot legally do. It cannot damage your property or physically injure you or others (California Civil Code section 1788.10).
An agency may only call between 8 a.m. and 9 p.m. If these hours are inconvenient for you, you may ask the agency to contact you at other times. There is no law that specifically limits the number of calls an agency may make to you, but repeated calls over a short period, which may be annoying or harassing, are prohibited. If you prefer that the agency contact you only by mail, you may ask them to do that. We suggest that you make that request by certified mail and keep a copy for your records (15 United States Code sections 1692c(1), 1692c(c) & 1692d(5); California Civil Code section 1788.11(d) & (e)).
To further protect your privacy, collectors cannot use postcards when contacting others, and envelopes must not contain information showing that they have been sent by a collection agency (15 United States Code section 1692(b)(4), (5)).
When contacting someone other than the person who owes the debt, the collector must give his or her name but not the name of the collection agency (unless specifically asked to give that). When contacting the person who owes the debt, the collector must give either his or her name, or the name of the collection agency.
A collector cannot represent themselves as anyone except a collector and must tell the person who owes the debt that he or she is trying to collect the debt. Likewise, a collection agency cannot use any words or symbols in its notices to make the person who owes the debt think the notices are legal documents when they are not, or that they come from anyone other than a collection agency (15 United States Code sections 1692b(1) & 1692e; California Civil Code section 1788.13.)
The creditor is not required to let you know it is referring your account to a collection agency. An exception is health spas, which must give you advance notice that the debt is being assigned for collection (California Civil Code section 1812.88).
The collection agency must provide the following information to you, either in its first contact with you regarding an unpaid bill or in writing within five days after that contact:
- Amount you owe;
- Name of the creditor; and
- Process to follow if you dispute the bill.
The five-day notification period applies whether the collection agency's first contact with you is by telephone or in writing, but many agencies include that information on their initial written notice, whether or not they have telephoned first.
Each written notice demanding payment for a bill must contain the following information (15 United States Code section 1692g(a)):
- Creditor's name (on the first notice);
- Name, address and telephone number of the collection agency;
- Date the notice was mailed;
- Amount due;
- Employer Contact; and
- A statement that the debt is assumed valid unless consumer notifies collector within 30 days of receipt of notice that the debt is disputed.
An agency may contact an employer, but only for the following reasons:
- To verify your employment.
- To verify your business location.
- To garnish your wages once you have been taken to court and a judgment was entered against you; or
- To find out whether you have medical insurance to cover a medical bill
In a situation where an agency is legally contacting your employer to verify your employment or business location or to garnish your wages, the agency must make its inquiry in writing. If the agency receives no response to its written communication within 15 days, the agency may contact your employer by other means.
A collection agency can contact you at work unless the debt collector knows or has reason to know that your employer prohibits you from receiving such communication. However, if you don't want to be contacted at work, you can request that they not telephone or send you notices at work. Be sure to make your request in writing to protect yourself. If the agency does send you a notice at work, it must be marked PERSONAL AND CONFIDENTIAL. If you request no further contact at work and the agency is unable to contact you at home, the agency may have no other option but to decide to sue you for the amount of the bill it is collecting (15 United States Code section 1692c(a)(3)).
You do not have to accept a collect telephone call from a collection agency unless you agree to it in advance. It is illegal for an agency to misrepresent the purpose of a call in order to trick you into accepting the charges (California Civil Code section 1788.11(c)).
If you want to stop all contact from the agency you may request that they not contact you again. This request MUST be in writing. We suggest that you mail it certified, "return receipt requested" so you have proof of its delivery. Once the agency receives your letter, its employees can only contact you one final time to explain what action they plan to take. After that, contact must stop. Remember, though, that if you request no further contact in any way, you may leave the agency with no choice but to take you to court (15 United States Code section 1692c(c)).
If you are unable to pay the whole amount, you may request that the agency make a payment agreement with you to allow regular payments to pay the bill in full. Make your request in writing and keep a copy for your records. This will help protect you. Although the agency is not required to accept a payment agreement, many agencies will try to make arrangements if you fully explain your situation.
However DO NOT MAKE AN AGREEMENT FOR MORE THAN YOU CAN AFFORD TO PAY JUST TO GET THE COLLECTOR TO STOP CALLING YOU. If you make an arrangement with the agency and then fail to make the payments, the agency may cancel the agreement, demand payment in full and possibly even sue you for the full remaining amount.
Also, it is important to send your payments directly to the collection agency.
Neither you nor the collection agency is required to sign a written contract, but either of you may ask the other to sign. If there is no written contract, and the collection agency doesn't want to sign one, you may protect yourself by writing them a letter (sent certified) stating the terms you have agreed upon and enclosing your first payment. Tell them in your letter that if they don't agree with the terms you have described there, they should write back to you telling you what they do agree to accept. Keep a copy of your letter or any payment agreement that you sign.
If possible, contact the agency BEFORE you miss a payment or send a partial payment. Explain the problem and what you plan to do to solve it and catch up on your payments. Many agencies will work with you especially if you have already made several payments on time.
There is no law preventing a collection agency from requesting a postdated check, however, a few restrictions may apply. The collection agency is prohibited from soliciting you to provide a postdated check for "purpose of threatening, or instituting criminal prosecution." Should a collection agency use this illegal type of collection technique, the issue before a court is whether the "check" is in fact a "postdated check." Therefore, it is advised that if you issue a postdated check, write the word "Postdated" above the date on the check. If you send a check dated more than five days ahead, the agency must send you written notice three to ten business days before it intends to cash the check (15 United States Code section 1692f(2), (3) & (4)).
Likewise, collection agencies cannot use the "Bad Check Law" to recover triple damages for postdated checks that were solicited for the purpose of seeking the statutory penalty provided by California Civil Code section 1719.
Bill Was Paid.
If you do not owe the bill, or if the bill has already been paid, send the agency a written explanation along with copies of receipts, cancelled checks and any other information to back up your claim. It is important to send your letter within 30 days after your first contact from the collection agency (15 United States Code section 1692g(a)(4)). Once the agency receives your dispute letter, it must stop further attempts to collect the debt until it sends you written verification to show that you do owe the bill and that the amount of the bill is correct (15 United States Code section 1692g(b)). If you are questioning only a part of the bill, the agency may not continue to collect on that part until it has provided verification, but you would still be liable for the rest of the bill, if it is a valid debt, and you may wish to make arrangements to pay that part of the bill.
Not Your Bill.
If you are not the person the agency is looking for, write and explain the mistake. You may be asked to provide a drivers' license or social security number to prove that you are the wrong person. If you are unsure about your legal responsibility for a debt, check with an attorney. If the collection agency is unable to obtain verification that you owe the debt, it may return your account to the creditor and stop collection efforts. The agency is not required to notify you if it does this. If the agency does return your account to the creditor, it may be assigned to another agency for collection.
Some agencies supply information on bills they are collecting to credit reporting agencies such as Experian, Equifax, or Trans Union. However, a collection agency cannot threaten to do this unless it is a customer of the reporting agency and actually intends to report your debt (15 United States Code section 1692e(8); California Civil Code section 1788.13(f)). Also, the collection agency must tell the reporting agency whether any dispute has been filed at the time it reports your debt, and it must update your record to show when the debt is paid. It does not have to remove the report at that time.
A collection agency can add interest to your bill, however, the terms and rates depend on the circumstances of your particular account. The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) must be expressly authorized by the agreement creating the debt or as permitted by law. An attorney should be able to tell you how much the agency can legally charge you. You are also entitled to an explanation from the collection agency as to how much they are charging you and why. You should ask them by letter to explain to you in writing.
A collection agency can sue you in Superior Court. A collection agency may not sue in Small Claims Court.
You Can File A Complaint.
If you feel, after reading this information that your rights have been violated by a collection agency, you can file a complaint with the Attorney General's Public Inquiry Unit. If the information you provide indicates that the collection agency has violated the law, we may contact the collection agency and send them a copy of your complaint. Although this may elicit a positive outcome, please be aware that some types of complaints (such as telephone threats or the use of abusive language by collectors) are very difficult to prove.
You may also wish to file a complaint with the Federal Trade Commission (FTC). This agency enforces the Federal Fair Debt Collection Practices Act. The FTC may be contacted by mail at Consumer Response Center, Washington, DC 20580-0001 or telephone at 1(877)-FTC-HELP or Internet at FTC Complaint Assistant.
If the information provided above does not sufficiently respond to your questions, we suggest you consult a private attorney. An attorney would directly represent your interests and is the one whose advice would be most helpful to you. You can obtain a referral to a certified lawyer referral service through the State Bar at (866) 442-2529 (toll-free in California) or (415) 538-2250 (from outside California), or via their website at: www.calbar.ca.gov
If you cannot afford a private attorney, you may consider contacting your local legal aid office. For a referral, visit www.lsc.gov and click on the Find Legal Assistance tab.