If a debt collector is calling or writing, or a collection account has appeared on a credit report, two federal laws set the rules. The Fair Debt Collection Practices Act limits how debt collectors may collect. The Fair Credit Reporting Act requires credit bureaus and the companies that report to them to handle information accurately and to look into disputes.
A collection problem can involve two things at once: a collector whose calls or letters feel like too much, and a credit report showing an account the consumer does not recognize or thinks is wrong. This page sets out what federal law says about each half of that problem, and what options the law describes.
What the FDCPA and FCRA Cover — and Why Both Laws Often Apply at Once
The Fair Debt Collection Practices Act (FDCPA), a federal statute, governs what debt collectors may and may not do while collecting a debt. Under 15 U.S.C. § 1692a(6), a debt collector is a person who uses any instrumentality of interstate commerce or the mails "in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." The statute lists exclusions, including a creditor's own employees collecting in the creditor's name.
The Fair Credit Reporting Act (FCRA), a federal statute, governs how credit information is gathered and shared. Three terms matter here:
- A consumer reporting agency, often called a credit bureau, is a company that collects information about consumers and sells reports about them.
- A consumer report is the report that company provides, such as a credit report.
- A furnisher is a company that sends information about a consumer to a consumer reporting agency, such as a bank, a card issuer or a debt collector.
One collection account can fall under both laws. How the collector calls, writes and describes the debt is FDCPA territory. Whether the account is reported accurately, and how a dispute about it is handled, is FCRA territory. Each law has its own rules, deadlines and remedies, and they do not borrow from each other. Federal law applies across the United States, and state law may add protections that differ from state to state.
What the FDCPA Prohibits: Conduct Debt Collectors May Not Engage In
Harassment comes first. Under 15 U.S.C. § 1692d, a debt collector "may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." The examples the statute lists include threats of violence, obscene or profane language, and making a phone ring repeatedly with intent to annoy. The list is not complete, so other conduct can also qualify. There is more on this in the page on debt collection harassment.
False statements are covered by 15 U.S.C. § 1692e, which bars "any false, deceptive, or misleading representation." Its examples include misstating the character, amount or legal status of a debt, falsely suggesting that someone is an attorney, and threatening action that cannot legally be taken or is not intended. Unfair practices are covered by 15 U.S.C. § 1692f. One example is collecting any amount that the agreement creating the debt does not authorize and the law does not permit. Both lists are partial.
Contact limits come from 15 U.S.C. § 1692c. Without the consumer's prior consent given directly to the collector or a court's permission, a collector generally may not communicate with the consumer in connection with the debt:
- at an unusual time or place, or one the collector knows or should know is inconvenient (absent knowledge to the contrary, a collector assumes the convenient time is after 8 a.m. and before 9 p.m. at the consumer's location);
- if the collector knows the consumer is represented by an attorney for the debt and can readily ascertain the attorney's name and address, unless the attorney fails to respond within a reasonable time or consents to direct communication; or
- at the consumer's workplace, if the collector knows or has reason to know the employer prohibits it.
Separately, except as the statute's separate section on acquiring location information provides, and without the consumer's prior consent given directly to the collector, a court's permission, or what is reasonably necessary to carry out a postjudgment judicial remedy, a collector generally may not communicate about the debt with anyone other than the consumer, the consumer's attorney, a consumer reporting agency if otherwise permitted by law, the creditor, or the attorney of the creditor or of the collector.
A consumer may also tell a collector in writing to stop. Under 15 U.S.C. § 1692c(c), once a consumer writes that they refuse to pay or want communication to stop, the collector may contact them again only for three purposes:
- to say its efforts are ending;
- to say the collector or creditor may use specified remedies it ordinarily uses;
- to say it intends to use a specified remedy.
Debt validation is the right to have a debt confirmed. Under 15 U.S.C. § 1692g, within five days after its first communication, a collector generally must send a written notice that includes the amount of the debt and the creditor's name, among other items, unless that first communication already contained the information or the consumer has paid. If the consumer disputes the debt in writing within the 30-day period, or in writing requests the original creditor's name and address, the collector must stop collecting the debt, or the disputed part of it, until it obtains and mails verification or the original creditor's name and address. The page on collection letter violations covers these notices in detail.
Conduct like this may violate the FDCPA, and whether a particular call or letter does depends on its facts.
Can a Collection Agency Report a Debt to a Credit Bureau?
Yes. A debt collector acting as a furnisher may report a debt to a consumer reporting agency, but the report must meet accuracy rules, and the collector must take certain steps first.
Under Regulation F, 12 C.F.R. § 1006.30(a), a collector generally may not furnish information about a debt until it has done one of the following:
- spoken with the consumer about the debt in person or by phone; or
- mailed a letter or sent an electronic message and waited a reasonable period to see whether it comes back undeliverable.
The CFPB's page on when a collector can report a debt describes that reasonable period as "generally 14 days." The same page says that a consumer who has received a validation notice has, in general, already been contacted for this purpose.
The accuracy duty is in 15 U.S.C. § 1681s-2(a). A furnisher may not report information it knows, or has reasonable cause to believe, is inaccurate; a person that clearly and conspicuously specifies to the consumer an address for notices is not subject to that first rule, but the notice rule described below still applies to it. "Reasonable cause" means specific knowledge, other than solely allegations by the consumer, that would cause a reasonable person to have substantial doubts about the accuracy of the information. Once a consumer has notified a furnisher at the address it specifies that specific information is inaccurate, the furnisher may not keep reporting it if the information is, in fact, inaccurate.
Disputes also reach furnishers through the bureaus. The FTC's guidance on disputing credit report errors says that when a bureau forwards a dispute, the business must investigate, report the results back, and notify all three nationwide bureaus if it finds the information inaccurate.
Credit Report Errors: What the FCRA Requires of Credit Bureaus and Furnishers
The rules for errors begin with 15 U.S.C. § 1681i(a). When a consumer disputes the completeness or accuracy of an item, the bureau must, free of charge, conduct a reasonable reinvestigation. A reinvestigation is the bureau's second look at whether the disputed information is wrong. The bureau must then record the item's current status or delete it.
That work must be done within 30 days after the bureau receives the dispute. The period may be extended by up to 15 days if the consumer sends relevant information during those 30 days. The extension does not apply if the bureau has already found the item inaccurate, incomplete or unverifiable within the 30 days. Within five business days after receiving the dispute, the bureau must notify the company that supplied the information.
One kind of error is a mixed file, a credit file that contains another person's accounts or details. Duplicates are another. A duplicate account may show one debt twice.
The FTC states that the bureau must give its results in writing, plus a free copy of the report if the dispute changed it. The CFPB's page on how to dispute a credit report error says a consumer may also dispute directly with the furnisher, which generally must investigate and respond within 30 days of receiving the dispute. The same page notes that a bureau need not investigate a dispute it reasonably finds frivolous or irrelevant, but it must send the consumer a notice explaining that decision within five business days after making it.
For checking reports, the FTC says each of the three bureaus offers a free report once a week at AnnualCreditReport.com. More on the process appears in the page on wrong information on credit reports.
How Long a Collection Account Stays on a Credit Report
There is a time limit, and it comes from 15 U.S.C. § 1681c(a)(4). A consumer reporting agency generally may not include in a consumer report "accounts placed for collection or charged to profit and loss which antedate the report by more than seven years." The same limit applies to most other adverse items under 15 U.S.C. § 1681c(a)(5), except records of criminal convictions. For an account placed for collection, the seven years begin when the 180-day period that starts on the date the delinquency preceding the collection activity began has expired (15 U.S.C. § 1681c(c)(1)). The limits do not apply to a consumer credit report used in connection with a credit transaction, or the underwriting of life insurance, involving $150,000 or more, or the employment of an individual at an annual salary of $75,000 or more (15 U.S.C. § 1681c(b)).
Bankruptcy cases are different. Under 15 U.S.C. § 1681c(a)(1), they may be reported for up to 10 years, measured from the date of the order for relief or the date of adjudication.
The FTC describes the same pattern in plainer terms. As long as the information is correct, it says, a credit bureau can report most negative information for seven years and bankruptcy information for 10 years.
This is a statutory limit, not a promised removal date. When a particular account ages off depends on the dates tied to that account. The page on old debt collection covers a related question: what a collector may still do about older debts.
When Debt Collection and Credit Reporting Conduct May Violate Federal Law: What Consumers Can Do
Each law has its own civil liability section, and each depends on what a court finds.
Under the FDCPA, 15 U.S.C. § 1692k(a) provides that a debt collector who fails to comply with the Act may be liable for three things:
- any actual damage the person sustained as a result;
- in an individual action, additional damages "as the court may allow, but not exceeding $1,000";
- in a successful action, costs and a reasonable attorney's fee as determined by the court.
In setting the amount, the court considers factors that include how often and how persistently the collector failed to comply, the nature of the failure, and whether it was intentional. A debt collector may not be held liable if it shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error (15 U.S.C. § 1692k(c)). Under 15 U.S.C. § 1692k(d), an action must be brought within one year from the date the violation occurs. The FTC adds that even when a court finds a violation, the consumer may still owe the debt.
Under the FCRA, the remedies turn on whether noncompliance was willful or negligent:
- Willful noncompliance (15 U.S.C. § 1681n). Actual damages, or damages of not less than $100 and not more than $1,000 (a different measure applies to a natural person who obtains a consumer report under false pretenses or knowingly without a permissible purpose), plus any punitive damages the court allows, and costs and reasonable attorney's fees in a successful action.
- Negligent noncompliance (15 U.S.C. § 1681o). Actual damages, plus costs and reasonable attorney's fees in a successful action.
Under each section, on a finding that an unsuccessful pleading, motion or other paper was filed in bad faith or for purposes of harassment, the court shall award the prevailing party attorney's fees reasonable in relation to the work expended in responding to it. These two sections generally do not apply to a violation of the furnisher accuracy duty in 15 U.S.C. § 1681s-2(a): under 15 U.S.C. § 1681s-2(c) and (d), violations of that subsection are enforced exclusively by the federal and state officials identified in that Act's enforcement provisions.
These are what the statutes make potentially available. Not every violation results in liability, and whether specific conduct violates either law depends on its facts.
Agencies are another avenue. The CFPB says a consumer can submit a complaint online or by calling (855) 411-CFPB (2372). The FTC's page lists both the FTC and the CFPB as places to report a collector. The page on illegal debt collection practices gathers the FDCPA's rules in one place.
If You'd Like a Consumer Rights Case Review
A collection problem rarely stays in one lane. The same account can raise questions about a collector's calls and letters and about how a bureau reported it, so the details matter.
This page covers the federal FDCPA and FCRA framework only. It does not cover every state law that may apply, Telephone Consumer Protection Act questions about collection calls or texts, identity theft blocking (the page on identity theft accounts addresses that), or background-check disputes.
A reader may request a consumer rights case review through Federal Consumer Rights.
