What is the difference between a creditor and a debt collector?
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The Fair Debt Collection Practices Act is designed to protect consumers from abusive or harassing conduct, false or misleading statements or unfair act by Debt Collectors.
What is a DEBT COLLECTOR and how is a DEBT COLLECTOR different from a CREDITOR?
A “Creditor” is defined at 15 U.S.C. §1692a[3]- “The term “creditor” means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.”:
A “Debt Collector is defined at 15 U.S.C. §1692a[6]- The term “debt collector” means any 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. “ There are some exclusions, that we will talk about (briefly) later.
Why is this important?
In Virginia, this is particularly important, because a debt collector is covered by the Fair Debt Collection Practices Act (FDCPA), and a creditor is not covered by the FDCPA. A debt collector is subject to regulation (and more importantly, to being sued) for acts that are abusive or harassing, false or misleading, or unfair and deceptive.
A creditor is NOT subject to anything. A creditor, and their employees may not violate criminal law in the collection of a debt. Generally, this means that they can’t send someone to your house to beat you up. That’s about it. The Fair Debt Collection Practices Act (FDCPA) does not apply.
So, what is a “Debt Collector?” A debt collector is anyone who uses the phone, mail, telephone, telegraph, or any other thing that crosses state lines, to collect debts that are or were owed to someone else.
The easiest way to explain this is examples.
- You owe First National Bank of Nonesuch (FNBN) for a credit card. FNBN’s employees call and violate the law (never mind how, that’s another blog entry, lets just assume that they did something that would violate the law). FNBN is a creditor. They did not violate the Fair Debt Collection Practices Act (FDCPA), because the act does not apply to them.
- You owe FNBN for a credit card, and the account goes into default. Mean Debt Collector (MDC) has an employee who calls and violates the law (once again, never mind how, that’s another blog entry). MDC (and their employees) are debt collectors as defined by the Fair Debt Collection Practices Act (FDCPA), so they have violated the law.
- You owe FNBN for a credit card, and the account does NOT go into default. Mean Debt Collector (MDC) has an employee who calls and violates the law (once again, never mind how, that’s another blog entry). MDC is not collecting an account that is in default, so they did not violate the Fair Debt Collection Practices Act (FDCPA), because the act does not apply to them- they are not collecting an account that went into default.
- You owe FNBN for a credit card, and the account goes into default. Junk Debt Buyer (JDB) lets you know that they have bought your account, and you should now direct all your payments to them. Then they call and violate the law (once again, never mind how, that’s another blog entry.). JDB has violated the Fair Debt Collection Practices Act (FDCPA) because they are debt collectors as defined by the act.
In other states, like North Carolina, California, Florida, and Maryland, creditors are covered by the state laws. VIRGINIA DOES NOT HAVE A STATE COLLECTION ACT. The Virginia Consumer Protection Act DOES NOT APPLY to debt collectors.
Read more about what we can do to assist you in protecting yourself from collection harassment or abuse, false or misleading statements or unfair and deceptive acts in the main section of our website.
Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.673.4358
You can fax us: 804.673.4350
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
1650 Willow Lawn Drive
Suite 300
Richmond, VA 23230
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Good info here, I’ve come across a few now with similar info. I am currently trying to get debt free, so can be a real help.
Well I tried debt consolidation loans but only ever got me into more debt. I opted for a debt management plan, 1 payment 1 worry. I think someone on here advised me to do so, anyway never looked back. I’ll be debt free in 8 years, my life back in my control.
Our experience with Debt Management Plans is that the consumer often gets sued, and when they notify the DMP that they are being sued, nothing gets done, and a default judgment is entered. Most people thereafter end up having to file for Bankruptcy. Be VERY careful when doing a DMP, and contact the creditors and the DMP to follow up, to make sure they are accepting the plan.
I’m looking for advice with my debts, I don’t want a loan. Any one got any tips?
Contacting a local lawyer to discuss your situation would be highly advised.
The advice depends on what kind of debts and where you are located.
Your e-mail address looks like a UK address, so a US lawyer would be of limited advice.
If you are in the US, we suggest contacting one of the lawyers at http://naca.networkats.com/members_online/members/directorya.asp?token=
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Finally got serious about paying off debt after Christmas. We’ve paid off 10 smallish debts (store cards, medical bills, personal loan) totaling $2500 so far. Sadly, we have about $22,000 more to go for the credit cards alone. Then there is a car, mortgage and massive student loans. Our first focus is to get rid of the credit cards, though. They are just eating away at our monthly budget.
Your header is a bit wonky in Opera, mate.
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We recommend against that site and any other site. The information there is inadmissible hearsay, and the score is not an accurate representation of your actual score.
Further, your dispute rights are severely curtailed, and may come with a Binding Mandatory Arbitration (BMA) clause. BMA eliminates your right to sue in court with a jury.
If that is not enough, most sites like that also require a credit card for ID validation, which then obligates you to buy a credit monitoring service for a monthly fee. Credit monitoring is unnecessary at that pace. Annual credit reports, which you may order for free once a year, can be obtained from calling the central source- 877-322-8228.
Disputes to the credit bureaus should be done in writing.
For more on credit reports, read our blog at http://www.krumbeinlaw.com/fcra_basics/
Thank You 4 The Great Post I heard FreeCredit-Report.net is definitely a great place to get my credit and get the score for free. Has Someone else used them?
We recommend against that site and any other site. The information there is inadmissible hearsay, and the score is not an accurate representation of your actual score.
Further, your dispute rights are severely curtailed, and may come with a Binding Mandatory Arbitration (BMA) clause. BMA eliminates your right to sue in court with a jury.
If that is not enough, most sites like that also require a credit card for ID validation, which then obligates you to buy a credit monitoring service for a monthly fee. Credit monitoring is unnecessary at that pace. Annual credit reports, which you may order for free once a year, can be obtained from calling the central source- 877-322-8228.
Disputes to the credit bureaus should be done in writing.
For more on credit reports, read our blog at http://www.krumbeinlaw.com/fcra_basics/
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