Love to Know (LTK): There is a lot of information out there. What do consumers need to know about these laws?

Beverly Blair Harzog (BH): When it comes to credit, there are many laws in place to protect consumers. Consumers need to know what rights are protected by these laws. If consumers know the laws, they’ll know when they’re being treated unfairly and when their rights have been violated.


Protection Under the Laws

LTK: How do the collection laws protect consumers?

BH: The laws are designed to ensure that consumers are protected from illegal or abusive tactics by collectors. The Fair Debt Collection Practices Act protects consumers from abusive collection practices. For instance, collectors can only call you between the hours of 8 a.m. and 9 p.m. and they cannot threaten you or use abusive language. Collectors are also prohibited from calling you at work if you’ve told them not to call you there.

Another law, the Fair Credit Reporting Act, protects you against misleading information that has been placed in your credit file by a collector. The law says that you have a right to know what is in your file and that, if it’s inaccurate, you have an opportunity to correct the mistakes.

LTK: How do these laws protect credit card companies and collection agencies?

BH: These laws were written to protect consumers, not the credit card companies or the collectors.


How to Take Action

LTK: What should consumers do if they think their rights have been violated?

BH: If you have a problem with a debt collector, contact your state’s Attorney General’s office and the Federal Trade Commission. The laws can vary by state, but your state Attorney General’s office can help you understand your rights within your state.

LTK: When should consumers obtain an attorney to represent them for violations of collection laws, if ever?

BH: If your rights have been violated, you have the right to sue the collector in a state or federal court but you must do so within one year from the time of the violation. Whether or not you should get an attorney depends on the individual circumstances of each case. Your Attorney General’s office should be able to offer advice on this issue.

LTK: What happens to creditors who break these laws?

BH: Of course, this will vary by case and the available evidence, but a judge can require the collector to pay you damages if you can prove that you suffered lost wages or other hardships. If you have a good case, you might also be reimbursed for your attorney’s fees and court costs. When a group of people sue a collector, this is a class action lawsuit. In class action lawsuits, the amount of damages can reach up to $500,000 or 1 percent of the collector’s net worth, whichever is lower.

LTK: Why is it important for consumers to know and understand credit card collection laws?

BH: It is important for consumers to know what their rights are so they know when a collector has crossed the line into abusive and/or illegal behavior.

LTK: What resources can consumers use to learn more about these laws?

BH: The Federal Reserve website is a very good resource to get a clear explanation of what the laws are as well as how they protect consumers.

I just want to stress again how important it is for consumers to empower themselves with knowledge. Know what your rights are so you know when they are being violated.


About Beverly Blair Harzog

Beverly Blair Harzog is a spokeswoman and contributing editor for CardRatings.com. She is the co-author of The Complete Idiot’s Guide to Person-to-Person Lending. She has also written for CNNMoney.com, Good Housekeeping, Bankrate.com, FoxBusiness.com, and more.

Learn more about Beverly by visiting her website or follow her on Twitter.

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