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Consumer Rights in Debt Collection

Posted by Credit Management Company on Jun 14, 2022

Debt collection can be a complex process, and consumer rights should always be a top priority. Whether you are attempting to collect a debt on behalf of your organization or are hiring a third-party debt collection service to streamline the collection process, understanding the rights of the consumer in debt collection is one of your responsibilities. To ensure you understand how important consumer rights are, we’ve put together an overview of consumer rights in debt collection.

Debt Protection Laws

Thanks to 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 protect them from unfair or abusive debt collection tactics. These rules add a layer of debt collection protection for consumers at a federal level. 

Validating and Requesting Proof of Debt

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

Consumers can also request proof of the owed debt. In those cases, the collection agency must send a debt validation letter within 30 days of the initial phone call making a request for proof.

Validation letters must contain very specific information, including: 

  • How much is owed.
  • The creditor collecting the debt.
  • A notice informing the consumer they have 30 days to dispute the debt. 
  • A statement letting the consumer know if they request additional information about the debt or creditor it will be provided within 30 days.  

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

Disputing Claims

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

Therefore, it’s incredibly important that all information provided to the consumer is factual. Any information reported on a credit report must be provided in a timely and accurate fashion. 

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

Choosing Which Debt Their Payment Goes Toward

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 healthcare industry or commercial industry when consumers may have undergone many operations or worked with many contractors. 

It is also important to know collectors are forbidden from using payments to pay disputed claims. 


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

First, collectors are only allowed to contact people between the hours of 8 a.m. and 9 p.m. Consumers can request an allotted time of communication that’s more convenient for them. 

Second, communication can be stopped 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. 

In those cases, collectors can only respond with a letter notifying the consumer what next steps will be taken, 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. In this case, consumers will 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 their place of work, neighbors, and family. However, they may request contact information for the consumer if contact is made with a third-party.

The only exception is a spouse or parent or guardian if the consumer is 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 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. For example, in Texas, the agency loses the ability to sue a consumer after four years. 

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


This may seem like a no-brainer, but receiving complete truthfulness and transparency is their right as a consumer. In the example of statutes of limitations, consumers should be aware of the current state of any statute of limitations concerning their debt.

Adding to the importance of accurate statements from the business, collection agencies 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 misrepresent who they are.

Understanding Consumer Rights

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

At CMC, we have decades of experience professionally representing our clients and successfully collecting on debts while following all fair debt collection laws and regulations. Our team uses the latest debt collection technologies and practices to respectfully and successfully facilitate debt repayments. 

If you have questions about consumer rights in debt collection, don’t hesitate to contact us! We’re here to help with your collections.