What debt collectors can and can’t do

The main laws

Two laws set most of the rules. The federal Fair Debt Collection Practices Act covers third-party collectors. California’s Rosenthal Fair Debt Collection Practices Act goes further and also covers creditors collecting their own debts. Both prohibit harassment, threats, false statements, and unfair practices.

Common rules

• Collectors generally cannot call before 8 a.m. or after 9 p.m.
• They generally cannot discuss a debt with others, such as neighbors or employers, except in limited ways.
• They cannot threaten arrest or actions they cannot legally take.
• A person can ask a collector in writing to stop contacting them, though that does not erase the debt.

Validation and disputes

Third-party collectors must send a validation notice describing the debt, the amount, the creditor, and how to dispute it. If a consumer disputes the debt in writing within the validation period (generally about 30 days), the collector must pause collection until it provides verification.

Licensing

Under California’s Debt Collection Licensing Act, most people and companies collecting consumer debts in California must be licensed by the Department of Financial Protection and Innovation (DFPI), which also takes complaints.

Old debts

Lawsuits have time limits. For many written contracts in California, the limit is four years. California law prohibits debt buyers and collectors from suing on debts after the limit has passed and requires specific disclosures when they collect old debts. Most medical debt can no longer appear on California credit reports.