Consumer Rights in Debt Collection Explained

Consumer Rights in Debt Collection Explained

Posted On: January 6, 2021

Are you facing debt collection? It’s important to know your consumer rights, so click here to find out everything you need to know.

When debt payments go ignored, it hurts more than just a credit score. 

It adds continuous stress to the companies and people attempting to sort out their finances. 

While hiring the services of a debt collector can streamline the debt collection process, there are a few consumer rights that all businesses and consumers should be aware of. 

In this article, we’ll breakdown the intricacies of consumer debt collection rights. And if you’re in the business of healthcare or leasing, or a person facing debt, then you’ll want to keep reading. 

Debt Protection Laws

Thanks to a little thing called the Fair Debt Collection Practices Act or FDCPA, a set of collection laws are in place to standardize the interaction between consumers and third-party collection agencies.

While this act does not excuse consumers from paying their debt, it does affect the process of how to collect debt payments. 

These rules aim to add a layer of debt collection protection for consumers at a federal level. 

Requesting Proof

Within 5 days of first contacting the consumer, the collection agency must send validation of the debt. If it is not disputed within 30 days, then agencies consider the amount is correct.

Consumers can also request proof of the owed debt. They’ll need to send a debt validation letter within 30 days of the initial phone call detailing a request for proof.

By sending a validation letter, the consumer is putting in a formal request to the agency demanding proof. Until the agency meets this demand, the collection agency cannot contact the consumer. 

If the consumer does not request any proof, the collectors may proceed as normal and assume the debt is correct.

Dispute Claims

By law, collectors cannot misrepresent themselves or any legal papers. 

So, it’s incredibly important that all information provided on the consumer from the business is factual and true. The information for the credit report must be provided in a timely and accurate fashion. 

If the consumer disagrees or spots errors within the report, they’re entitled to dispute the claims and request the removal of any inaccuracies from the credit bureau. 

Pick and Choose

Under the FDCPA, if a consumer owes more than one company debt, or has more than one debt with a company, the consumer is allowed to choose which debt their payment goes towards.

This is common in the health industry or commercial industry when consumers may have undergone many operations or worked with many contractors. 

Collectors are also forbidden from using payments to pay disputed claims. 


There are a few ways a consumer can limit communication from a collection agency.

Firstly, collectors are only allowed to contact someone between the hours of 8 am and 9 pm. But, consumers can request a different allotted time of communication that’s more convenient for them. 

Secondly, communication can halt altogether. When a consumer submits a written letter stating their desires for the collection agency to stop calling them, the collection agency must cease all communication. 

Collectors can only respond with a letter notifying what steps will be taken next if any.  

However, this does not stop the collection process.

While the consumer may wish to not receive phone calls, the collection agency can still sue for the owed debt. Consumers will only have less awareness of the process.

Entitled Privacy  

There are many privacy regulations stipulated in the FDCPA in regards to debt collection rights.

Collection agencies cannot discuss a person’s debt with anyone else. This includes neighbors, place of work, and family. However, they may request contact information for the consumer if contact is made with a third-party.

The only exception being a spouse or parent or guardian if the consumer’s under 18. 

Collectors should not contact a consumer at work, especially if there are rules against personal calls at work. Consumers can either ask over the phone or submit a written letter as documentation, asking to end work calls. 

If a consumer has hired the use of an attorney, then the collector can only talk to the attorney. They cannot bypass them and talk to the consumer. 

Time Limitations

The FDCPA puts a statute of limitations or time frame on what and when a collector can do things. 

For example, there is a finite amount of time in which a collector can sue consumers for a debt. Once that time is up, consumers will still need to pay the debt, but they can prolong the process of paying. 

The time limit varies from state to state. Here in Texas, after 4 years the agency loses the ability to sue a consumer. 

The debt will also continue to be visible on the credit report. For collections, it can remain on the report for up to 7 years. 


This may seem like a no-brainer, but receiving complete truthfulness and transparency is their right as a consumer. 

Harkening back to the statute of limitations. Consumers should be aware of the current state of any statute of limitations concerning their debt.

Adding on to the importance of accurate statements from the business, collectors can only present factual information to the consumers. They cannot misrepresent the urgency of the situation or the amount of debt. 

They also cannot misrepresent the legal repercussions of avoiding payments or who they are.

Understanding Consumer Rights

Regardless of the amount of debt owed or the reasons for delaying payments, consumer rights are of the utmost importance at any collection agency.

We hope you found this article helpful. Here at NRS, we want everyone to have a fair chance, and understanding the legality of debt is the best way to do so.

If you have any questions, don’t hesitate to contact us or check out our blog for more industry insight!

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Nationwide Recovery Systems, Ltd.