The Fair Debt Collection Practices Act (FDCPA) governs the activities of debt collectors. One of the most common questions I get is “Am I a debt collector?”
Watch this video to find the answer to that question.
Below is a transcript of the video:
This is something that I like all dealers to be aware of, especially those in buy here/pay here and in businesses in finance, and that’s the FDCPA, the Fair Debt Collection Practices Act. The one thing that scares dealers the most, at least those in buy here/pay here that I hear a lot is, how do I comply with the FDCPA? What collection activities can I take? Am I governed by the FDCPA, and can I make auto-dial phone calls? Can I send letters? Can I make Facebook messages? Can I reach out to someone on WhatsApp? Can I text?
These are all different issues governed by the FDCPA, and they all have different answers so I’m not going to go through them all in this video because otherwise, we’d be here for hours. On a case-by-case basis, it’s worth an analysis.
The one thing that I do want to mention about the FDCPA is who qualifies as a debt collector under the FDCPA. The major one that we see all the time is that first-party debt collectors are not subject to the FDCPA. This means people that own or businesses that established and own the debt, like a buy here/pay here dealer, are not usually subject to the FDCPA.
Again, that’s not always the case. Take that with a grain of salt. Usually, the FDCPA only applies to what’s called third-party debt collectors. Those are debt collectors that do not own the debt but instead are merely acting as a collection firm to collect on the debt. That does also apply to law firms that are debt collection law firms, not just debt collection finance entities, but also debt collecting law firms.
So just to recap that real quick, the FDCPA stands for Fair Debt Collection Practices Act. It governs the collection of debts and usually a first-party debt collector – that’s the one that owns and certainly established and owns the debt – is not governed or restricted by the restrictions in the FDCPA. Again, though not always the case.
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