The Effect Of FDCPA

The Fair Debt Collection Practices Act (FDCPA), a federal law (15 USC 1692 et seq.), which became effective in March 1978 and has been amended several times, is designed to eliminate abusive, deceptive and unfair debt collection practices. It also protects reputable debt collectors from unfair competition and encourages consistent state action to protect consumers from abuses in debt collection. The FDCPA applies only to the collection of debt incurred by a consumer primarily for personal, family or household purposes. While it does not apply to the collection of commercial debt, there is a gray area where a debt incurred for a business purpose could fall under business or agricultural purposes.

In 2010, Congress made changes to the FDCPA and other laws that affect credit grantors and debt collection, and in 2011, the Consumer Financial Protection Bureau was launched as the first government agency solely dedicated to consumer financial protection. Debt collection constitutes one of today's most important consumers' financial concerns of the federal government making debt collection even more complicated.

It is important that creditors review data integrity surrounding credit granting, documentation, record keeping and credit reporting and adjust procedures and policies for customer disputes and complaints. While this may make things more cumbersome, recognizing that at the same time proper record keeping will not only keep you from violating federal and state laws surrounding credit granting, good record keeping can help make your collections attorney more successful at collecting your debts.

As attorneys engaged in consumer debt collection we are aware that the FDCPA governs our actions. We take our responsibility seriously as well as our obligations as attorneys who are governed by the Ohio State Bar Association, and while some aspects of the CFPB authority remain unclear, we will continue to sharply focus on compliance with federal law.