The information below will help you better understand the debt collection and credit reporting process, and provides some resources that can help you stop creditor calls and unwanted solicitations.

Debt Collections Practices
Due to the high cost of litigating debt collection lawsuits, many consumer creditors hire independent debt collectors to attempt to collect payment by informal methods, such as letters and telephone contacts. Typically, the collectors make money by receiving a percentage of any money collected for the original creditor. While this makes sense from a business perspective, it can lead to situations where under-trained or unscrupulous collectors have the incentive to use whatever means are feasible to persuade the debtor to pay. Unfortunately, these methods can sometimes degenerate into illegal activities, such as: harassment (e.g. late night or repeated telephone calls), false threats of lawsuits or arrest, threats to ruin the consumer's credit rating, embarrassing communications to employers, friends, or neighbors, or even physical intimidation.

Fair Debt Collection Practices Act ("FDCPA")
The Fair Debt Collection Practices Act (or FDCPA) is a United States statute added in 1978 as Title VIII of the Consumer Credit Protection Act. Its purposes are to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. It is sometimes used in conjunction with the Fair Credit Reporting Act. To view additional details of the FDCPA and how it impacts you, please visit our FAQ page.

Fair Credit Reporting Act ("FCRA")
The FCRA regulates the collection, dissemination, and use of consumer credit information. Along with the FDCPA, it forms the base of consumer credit rights in the United States.

Consumer reporting agencies (CRAs) are entities that collect and disseminate information about consumers to be used for credit evaluation and certain other purposes. The 3 big CRAs are Experian, Trans Union and Equifax. They hold the databases which are the origins of a consumer's credit report. CRAs have a number of responsibilities under FCRA, including the following:

1. Provide a consumer with information about him or her in the agency's files and to take steps to verify the accuracy of information disputed by a consumer. Under the Fair and Accurate Credit Transactions Act (FACTA), an amendment to the FCRA passed in 2003, consumers are now able to receive one free credit report a year. The free report can be requested by telephone, mail or through the government authorized website, annualcreditreport.com.
2. If negative information is removed as a result of a consumer's dispute, it may not be reinserted without notifying the consumer within 5 days, in writing.
3. CRAs may not retain negative information for an excessive period of time. The FCRA spells out how long negative information, such as late payments, bankruptcies, tax liens or judgments may stay on a consumer's credit report - typically 7 years from the date of the delinquency. The exceptions: bankruptcies (10 years) and tax liens (7 years from the time they are paid).

An information furnisher, as defined by the FCRA, is a company that provides information to consumer reporting agencies. Typically, these are creditors, with which a consumer has some sort of credit agreement.

Under the FCRA, these information furnishers may only report to a consumer's credit report under the following guidelines:

1. They must provide complete and accurate information to the credit rating agencies.
2. The duty to investigate disputed information from consumers falls on them.
3. They must inform consumers about negative information which has been or is about to be placed on a consumer's credit report within 30 days.

Some fraction of consumer credit reports contain errors. A study released by the U.S. Public Interest Research Group in June 2004 found that 79% of the consumer credit reports surveyed contained some kind of error or mistake. As a result, many consumers frequently invoke their rights under the FCRA to review and correct their credit reports. The Fair and Accurate Credit Transactions Act ("FACTA") of 2003 has allowed easier access to consumers wishing to view their reports and dispute items.

To visit the full text of the FCRA, follow this link: http://www.ftc.gov/os/statutes/fcradoc.pdf

Stop Credit Card Solicitations
The Fair Credit Reporting Act entitles you to contact each or all of the major credit bureaus and request them to stop sending you card solicitations and related offers. For more information, call 888-5OPTOUT (567-8688).

Do Not Call Registry at donotcall.gov
On June 27, 2003, the US Federal Trade Commission opened the National Do Not Call Registry, in order to comply with the Do-Not-Call Implementation Act, passed by Congress and signed into law by President Bush in March 2003. The goal was to provide a way to block many unwanted telemarketing calls. Nearly 51 million home and cellular telephone numbers have been placed on the list since June 2003. Consumer may register their phone numbers at - 888-382-1222 or www.donotcall.gov. Consumers need to re-register after 5 years.