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Let's Talk Debt Collection

I recently started a series on Tik Tok where I expose the misinformation that "credit specialists" on the app put out that could really do some damage to the average consumer's credit profile. The two videos I have posted so far are getting some traction (view them here) and I want to explain the law that I speak on and provide you with a resource to do your own fact-checking.


The Fair Credit Reporting Act ensures the accuracy, fairness, and privacy of the information reporting to the credit bureaus about you. It also houses several laws that give consumers extensive protections against things like unfair billing practices, identity theft, and abusive debt collection practices.


In the latest video, I reference the FDCPA or the Fair Debt Collection Practices Act. You can click here to view the direct link to the FTC to view it.


The FDCPA was designed to protect consumers against abusive, deceptive, and unfair debt collection practices. I've received DMs and even comments like this one trying to argue the definitions and manipulate the law in a way that is detrimental to the average consumer. If you don't know any better and run across this misinformation, you could end up being sued should you try to use it.


Definitions: 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 to another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include --


(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;


(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;


(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;


(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;


(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and


(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due to another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.


Using this definition that is in the act itself, debt collectors can legally purchase your debt from a creditor. Proving the debt is valid after it exchanges hands is something else in its entirety and starts dipping into disputing. That's a different subject.


Click here to view a PDF I keep on hand to reference a summarization of the FDCPA and its protections.

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