Do Debt Buyers Follow the Same Rules as Debt Collectors Under the FDCPA?


April 17, 2017

For a lot of people, debt is a sore topic. They either don’t want to talk about it because they’re scared of how technical it can be, or they ignore it because they don’t think it’s important. You may not even realize that you aren’t dealing with the original debt in some cases. For example, did you know that debt can be bought? If you didn’t, then you will be surprised when, after taking a loan from a small financing company, suddenly a big agency is threatening to sue because you defaulted on your payments.

Debt Collection Harassment Attorney Covers Sold Debt

The key to understanding debt is to start asking questions, like “Can debt be sold?” To answer that, yes, it can, and it’s a common practice. But, do debt collectors and debt buyers follow the same rules? The legality of this is covered by the Fair Debt Collection Practices Act (FDCPA).

How Does Debt Buying Work?

If companies can do this, the next logical question to ask is, “How?” There are creditors who are in the business of loaning money to consumers, and there are creditors who prefer buying already incurred debt from the previous creditor. The buying creditors purchase them at a discount, allowing room for profit but benefitting the previous creditor because they don’t have to worry about billing you.

Even though debt buyers are technically classified as creditors, under the FDCPA, debt buyers are considered debt collectors. Fortunately, that means that you are protected in case that particular debt buyer does something that’s against the FDCPA provisions.

What are Possible Violations of Debt Buyers?

Generally, the FDCPA protects debtors from the unfair, deceptive or abusive practices committed by debt collectors or debt collecting agencies. For example, when they start harassing a debtor for payment, be it physical or verbal, the debtor can sue the debt collecting agency with the help of a debt collection harassment attorney.

Because under FDCPA, debt buyers are classified as debt collectors, they are expected to act with the same respect for the debtors. That means all forms of communication or reaching out to the debtor should be done in good faith, using the creditor’s own identity, being transparent if they’re using other companies to reach out to debtors, such as flat rating companies, and not using any form of harassment in the process. If the debtor could prove that the debt buyer engaged in any of those activities, he can sue them under the FDCPA.

Source: Nolo

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About the Author

Michael works in practice areas of Personal bankruptcy – Chapter 7 and Chapter 13, FDCPA, FCCPA, TCPA, Improper credit reporting under the Fair Credit Reporting Act (FCRA), Collection Litigation Defense, and Foreclosure Defense.