Florida is one of the states with the highest levels of debt in the U.S. When it comes to debt collection practices; there are two major laws: Fair Debt Collection Practices Act and Florida Consumer Collection Practices Act. While both aim to protect consumers from unfair and abusive debt-collection tactics, they have some key differences.
Debt Collection Laws in Florida
FDCPA: Protecting Consumers from Unfair Debt Collection Practices
The Federal Fair Debt Collection Practices Act (FDCPA) is a federal law that protects borrowers against unfair, abusive, and deceptive debt collection practices. This law applies to consumer debts, such as personal, family, and household loans. It doesn’t include business debts. In addition, the FDCPA applies to third-party collectors, but it doesn’t extend to creditors.
FCCPA: Safeguarding Consumers Against Unfair Trade Practices
The Florida Consumer Collection Practices Act (FCCPA) is a state law that safeguards debtors against unfair debt collection practices. It contains most FDCPA provisions but is not limited to it and has a more extended approach.
FCCPA law applies to original creditors & third-party debt collectors, unlike its federal counterpart. This law demands that all the debt collection agencies in Florida get registered and renew their registration annually.
Difference Between State and Federal Protections
The FDCPA law doesn’t allow debt collectors to talk to third parties about the debt, subject to some exceptions. In addition, the law prevents them from calling the debtor at work when they tell them not to do so. Moreover, this law also protects debtors from harassment, abuse, or misleading in debt payments.
On the other hand, when we talk about the FCCPA, it supplements the federal FDCPA and offers debtors even more protection if they live in Florida. The FCCPA stops both debt collectors & creditors from using abusive, deceptive, and misleading debt collection practices.
However, the FDCPA mainly applies to collectors and some debt buyers, but not an original creditor, unless it's using another name that implies a third party is trying to collect the debt.
Prohibited Debt Collection Practices Under Florida Law
Many debt collection practices are prohibited under the Florida Law. A consumer protection lawyer in Florida said he has filed more than 1,000 lawsuits alleging that debt collectors failed to follow laws governing debt collection.
Let us have a look at the prohibited practices that creditors and debt collectors can't do:
- Threaten - Threatening to hurt the debtor or utilizing violence.
- Harassment - Harassing the debtor or their family member about the debt.
- Reputation damage - Sharing false or reputation-damaging information about the debtor with third parties (other than their family) who don’t have legitimate business need for it.
- Rude language - Using rude, offensive, or abusive language while talking to the debtor or their family.
- Contacting off-hours - Contacting debtor between 9 p.m. and 8 a.m. without their permission.
- Using improper language - Mailing documents with embarrassing or inappropriate language on the envelope or a postcard.
- Enforcing illegitimate debt - Attempting or threatening to enforce an illegitimate debt against the debtor.
- Communicating with employer - Talking to the debtor’s employer about their debt or threatening to do so without a legal judgment.
- Acting like a government official - Pretending to be a police officer or claiming to represent a government agency.
- Communicating directly - Communicating directly with the debtor despite knowing an attorney represents them.
- Fake attorney - Pretending to be an attorney or falsely claiming that an attorney is involved.
- Fake documents - Sending documents to debtors designed to look like legal or government communications, such as fake attorney letters or summons.
- Reporting - Reporting or threatening to report negative information about a disputed debt to credit agencies without acknowledging the debtor’s dispute.
Licensing Requirements for Debt Collectors
The FCCPA law has made it mandatory for all debt collectors to be registered with Florida. Here are the licensing requirements for debt collection agencies:
- Register - All consumer collection agencies must register with the Florida Office of Financial Regulation (OFR) before engaging in collection activities.
- Submission - Agencies must submit a completed application form and the necessary fees to the OFR.
- Checking - Control persons within the collection agency must undergo fingerprinting and background checks as part of the registration process.
- Surety bond - Commercial collection agencies must obtain a $50,000 surety bond to ensure compliance with state regulations. For instance, in Arizona, the bond is $10,000, while in California, it is $25,000.
- Renewal - Registrations must be renewed annually, and agencies should submit renewal applications and fees before December 31st every year.
- Compliance - Agencies must adhere to the provisions of the FCCPA and FDCPA, which govern ethical collection practices and protect consumer rights.
- Penalty - If someone fails to register, they are fined $10,000, plus attorneys' fees & costs. OFR charges fines & enforces the registration requirements. Also, the Florida attorney general can file a lawsuit against that debt collector.
- License - Borrowers should always verify if a debt collector is properly licensed to avoid scams. They can check their license by visiting official state websites or contacting the regulatory office directly.
Rights of Borrowers in Florida
Borrowers in Florida enjoy many rights that safeguard them. Let us have a look at their rights.
Accurate Information
Borrowers can receive accurate and precise information about their loan terms, including the interest rate, repayment conditions, and associated fees.
In addition, they are entitled to a written loan agreement that outlines all the transaction terms for their reference and records. If any information on loan documents or credit reports is wrong, borrowers can dispute inaccurate information and ensure that those errors are adequately corrected.
Fair Treatment and Privacy
Borrowers are entitled to fair treatment and are free from discrimination based on gender, race, national origin, or religion. Borrowers enjoy privacy rights, and lenders must keep their personal and financial information confidential.
Power to Complain
The Consumer Financial Protection Bureau reports that over 16,000 debt collection complaints were filed in Florida last year.
In case of harassment and violation of FDCPA law, the borrower can complain to the state Attorney General's office. While the Attorney General cannot take action on the borrower’s behalf, the complaint will address misconduct. In addition, the borrower can also file a lawsuit against the debt collector under the federal FDCPA.
If the borrower wins the case, the court might award compensation, which can include actual damages, statutory damages of up to $1,000, punitive damages if found appropriate, and the coverage for their attorney's fees and court costs.
Borrowers who want help with Florida's Fair Debt Collection Laws can file a complaint with Florida's Office of Financial Regulation and the federal Consumer Financial Protection Bureau (CFPB). After the complaint submission, the CFPB works to get a response from the debt collector within 15 days.
Respond in Court
If a debt collector sues the borrower, they can respond in court and even hire an attorney to represent them. In addition, the borrower can also try to settle the debt. Moreover, if the debt collector violated federal or state laws in the debt collection process, the borrower could even have leverage in the debt settlement negotiations.
Rights of Debt Collectors in Florida
Debt collectors in Florida also enjoy many rights, like borrowers, that safeguard them. Let us have a look at their rights.
Use Garnishment
Debt collectors can use the garnishment process, where the court authorizes the lender to collect money directly from the debtor’s wages or third parties, such as employers or financial institutions, that owe the debtor money.
Property Lien
The court may grant the lender the right to place a lien on the debtor’s assets, including real estate. The lender can sell the property to recover the debt. Sometimes, lenders can also request a court order to freeze the debtor’s assets. However, if they seek to freeze assets before a judgment, they must post a bond to compensate the borrower if the latter prevails in civil litigation.
Verify Borrower
The creditors can ensure that their loans are handled fairly and lawfully. For that, they can verify the borrower’s information during the loan application process.
Receive Timely Payments
Debt collectors have the right to receive timely payments from borrowers, as agreed upon in the loan terms and following the law. However, if the borrower fails to meet their obligations, the creditor can enforce the terms of the loan agreement, like collecting payments, charging interest, or taking legal action to recover their unpaid debts.
Moreover, creditors can hire debt collection agencies or sell outstanding debts to professionals to improve payment recovery efforts.
Statute of Limitations for Debt Collection
In Florida, the time limit for debt recovery is five years for written contracts and four years for oral contracts. If the lender gets a court judgment against the borrower, they must enforce it within 20 years.
The time limit begins when a payment is missed or when the debt occurs. It can restart if the borrower makes a new payment or signs a new agreement to pay the debt. Once the limitation period expires, the lender may lose the right to sue the borrower to enforce the loan agreement.
While the lender may try other ways to recover the debt, the borrower is not legally required to cooperate after the time limit has passed. Lenders need to act quickly to protect their interests.
They should remember that making a partial payment on a debt can reset the statute of limitations, restarting the period from the date of that payment or acknowledgment. Even a small payment or simply confirming the debt in writing can extend creditors' time to file a lawsuit.
Conclusion
The Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act (FCCPA) protect consumers from harassment, misrepresentation, and unfair tactics while allowing businesses to recover debts lawfully.
Debt collectors must follow best practices on fair treatment, clear communication, and strict compliance with state and federal laws.
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FAQs (Frequently Asked Questions)
- How long can a debt collector pursue an old debt in Florida?
Florida's statute of limitations for filing a debt collection lawsuit is typically five years. After five years, a creditor generally cannot sue a debtor to recover an old debt against certain exceptions.
- Can a debt collector take you to court in Florida?
Yes, a debt collector can take you to court in Florida. For that, they can file a lawsuit against the debtor. Once they obtain a judgment for the amount owed, they can identify any non-exempt assets belonging to the debtor. After that, they can use state laws to seize those assets for repayment.
- What is the 11-word phrase to stop debt collectors?
If you’re struggling with debt or being harassed by debt collectors, you can use the phrase: "Please cease and desist all calls and contact me immediately."
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