{Angry Man on Phone with Bill}

Finding yourself in debt can be difficult.  Bills can pile up quickly and eventually they can be very hard to pay.  Unfortunately, you can't just pretend that your debt doesn't exist. You might be able to avoid your creditor at first, but in time you may find yourself pursued by a professional "debt collector" or "consumer collection agency."

If you use credit cards, owe money on a personal loan or are paying a home mortgage, you are considered a "debtor."  In Connecticut, the Department of Banking administers the laws and regulations that require debt collectors to treat you fairly.  Of course, these laws and regulations do not erase any legitimate debt you owe.  

Please note: If you live outside Connecticut, your state may have its own consumer protection laws.  Contact your state's financial regulator for local help.

The following Q&A relates to consumers' rights under the law if you find yourself in debt.

What is a creditor?

A creditor is any person to whom a debt is owed by a consumer when the debt results from a transaction taking place during the ordinary course of the creditor's business.

What is a consumer collection agency?

A consumer collection agency, or debt collector, is any person who regularly collects debts owed to others.

What debts are covered?

Fair debt collection laws cover personal, family and household debts, including child support and money owed to a municipality for personal property tax.

How may a consumer collection agency contact you?

A collector may contact you in person, by mail, telephone, telegram or fax. A collector may not contact you, however, at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree to be so contacted.  If you inform a collector that you have an attorney, the collector must contact the attorney rather than you.  

Can a consumer collection agency call you at work?

Yes.  However, a debt collector may not contact you at work if the collector knows or has reason to believe that your employer disapproves of such contacts.

Can a consumer collection agency contact anyone else about your debt?

A collection agency may not communicate with anyone about your debt besides you, your attorney, a credit agency, the creditor or the creditor's attorney.

A collection agency may only contact other people to find out where you live, what your phone number is, and where you work.  They may not mention that you owe any debt.  They are prohibited from contacting such third parties more than once.  Debt collectors may not communicate by post card, and they may not use any language or symbol on a mailing to indicate that the communication relates to the collection of a debt.

Can you stop a consumer collection agency from contacting you?

You can stop a collector from contacting you by writing a letter telling the collector to stop.  Once the collector receives your letter, it may not contact you again, except to say there will be no further contact or to notify you that the agency or the creditor intends to take certain specific actions.  Please note: sending such a letter to a consumer collection agency does NOT make your debt go away if you actually owe it.  You can still be sued by your original creditor.

What must a consumer collection agency tell you about the debt?

Within five days after you are first contacted, a collection agency must send you a written notice that contains the following information:

• the amount of the debt;
• the name of the creditor to whom you owe the debt;
• a statement that unless you dispute the validity of the debt within 30 days after its receipt, the agency will assume the debt is valid;
• a statement that if you notify them in writing within that 30-day period that the debt is disputed, then the consumer collection agency will mail you proof that you owe such debt; and
• a statement that informs you that you may request -  in writing and within that 30-day period - the name and address of the original creditor, if different than the current creditor.  

What types of debt collection practices are prohibited?

Harassment

Consumer collection agencies may not harass or abuse you or any third parties they contact.  For example, consumer collection agencies may not:

• use threats of violence or criminal means to harm you, your reputation or your property;
• use obscene language;
• publish a list of consumers who refuse to pay their debts (except to a credit rating agency);
• advertise the sale of your debt in order to coerce payment;
• repeatedly use the telephone to annoy, abuse or harass someone; or
• place telephone calls to you or your attorney without disclosing the caller's identity.

False or misleading representations 

Consumer collection agencies may not use any false, deceptive or misleading statements when collecting a debt. For example, consumer collection agencies may not:

• falsely imply that they are attorneys or government representatives;
• misrepresent the character, amount or legal status of your debt or any services or compensation that may be received for the collection of your debt;
• falsely represent or imply that a sale, referral or other transfer of any interest in the debt will cause you to lose any claim or defense to payment of the debt or become subject to any prohibited practice;
• falsely imply that you have committed a crime;
• communicate or threaten to communicate false credit information;
• send you anything that looks like an official document from a court or government agency when it is not;
• use deception as a means to collect your debt or obtain information about you;
• fail to clearly inform you that any information obtained will be used toward collection of your debt;
• falsely imply that accounts have been turned over to innocent purchasers for value;
• indicate that papers being sent to you are legal forms when they are not;
• indicate that papers being sent to you are not legal forms when they are; 
• use any name other than the true name of their business, company or organization; or
• falsely represent that they operate or work for a credit bureau.

Consumer collection agencies also may not state that:

• you will be arrested if you do not pay your debt;
• they will seize, garnish, attach or sell your property or wages, unless the collection agency or creditor intends to do so and it is legal to do so; or
• actions, such as a lawsuit, will be taken against you when such actions legally may not be taken, or when they do not intend to take such action.

Unfair practices 

Consumer collection agencies may not engage in unfair practices when they try to collect a debt. For example, collectors may not:

• collect any amount greater than your debt that is not expressly authorized by the agreement creating the debt;
• accept a check postdated by more than five days unless they notify you that they intend to deposit the check between three and 10 days before the intended date of deposit;
• deposit a post-dated check prematurely;
• use deception to make you accept collect calls;
• take or threaten to take your property unless this can be legally done; 
• contact you by postcard; or
• use any language or symbol other than their address on an envelope that would indicate that the communication is about a debt.

Can a consumer collection agency continue to contact you if you believe you do not owe money?

A consumer collection agency may not continue to contact you if, within 30 days after you receive the written notice, you send them a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

What control do you have if you have multiple debts?

If you owe more than one debt, any payment you make must be applied to the debt you indicate. A consumer collection agency may not apply a payment to any debt you believe you do not owe.

What can you do if you believe a consumer collection agency has violated the law?

You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. A group of people also may sue a consumer collection agency and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

How can I get more information about consumer collection agencies?

Consumer collection agencies must be licensed in Connecticut.  If you have been contacted by a collection agency and would like to find out if it is licensed, check the department's online listing.

If you live in Connecticut, department staff is available to help you with debt collection issues.  Staff can answer questions or investigate consumer complaints to determine if action may be taken against collection agencies that engage in unfair or deceptive practices.

Related Link:

The Federal Trade Commission published a report on the Fair Debt Collection Practices Act in March 2004 that provides an overview of the types of consumer complaints received by the Commission regarding unfair debt collection and a summary of its enforcement actions. The report also details educational information that is available to both consumers and collectors.  The publication may be accessed at http://www.ftc.gov/os/2004/03/2004fdcpareport.pdf (PDF file, 67 KB).

Please note: This page provides information on issues that consumers have raised with the department in the past.  It does not, however, represent a complete statement of the law which may be found elsewhere on this Web site.