A Guide to Debt Collection Laws in Pennsylvania

Historically, debt collection has been an industry rife with corruption, harassment, and other unscrupulous practices. In order to protect residents in debt, Pennsylvania has created a number of regulations and laws designed to govern exactly how debts can be collected. Knowing and understanding these laws is a necessary part of ensuring you and your family are treated legally and fairly by debt collectors. 

Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is a federal law passed by Congress in 1977 and that is designed to protect consumers from unfair debt collection practices. It also has the added benefit of protecting reputable, law-abiding debt collectors from unfair competition. The act outlines certain behaviors which debt collectors cannot participate in. Specifically, it prohibits:

• Deceptive of Abusive Conduct: Debt collectors are not allowed to use deceptive or abusive conduct. This includes contacting debtors at odd hours, threatening legal action, or revealing debts to others.  
• Repeated Contact: Debt collectors cannot repeatedly call debtors or contact them at their place of employment once they have been told not to. 
• Harassment: Debt collectors cannot engage in any harassing behavior. The most common form of harassment seen in these situations is purposefully making the phone ring repeatedly or at odd hours.
• Early Deposit of Post-Dated Checks: Debt collectors cannot deposit post-dated checks before the due date. They are also forbidden from threatening to deposit a post-dated check prior to its date..
• Deceptive Communication: Debt collectors cannot conceal the true purpose of a communication. This includes pretending to not be a debt collector.

Any debt collector who is found to have violated the FDCPA stands to face penalties, usually in the form of fines. 

Pennsylvania Debt Collection Laws

As a federal act, the FDCPA applies to any and all debt collectors operating anywhere in the United States, including the state of Pennsylvania. However, in an effort to further regulate debt collection, Pennsylvania passed the Fair Credit Extension Uniformity Act, known as FCEUA. This act encompasses the FDCPA while also more strictly defining the behaviors debt collectors are prohibited from participating in. PA debt collection laws ensure that no one is treated unfairly by debt collectors.

How the Debt Collection Process Works

The debt collection process is relatively simple and straightforward. Generally, it will look like this:

1. The creditor attempts to collect the full debt or negotiate a repayment plan on their own.
2. After failing to collect the debt on their own, the original creditor sells the debt to a collection agency. 
3. The collection agency attempts to contact the debtor. This can be done through phone, email or letter.
4. The collection agency sends a debt validation letter to confirm the debt and the amount owed. At this point, the debtor has 30 days to dispute any errors regarding the debt.
5. If contact is made with the debtor, the collection agency will try to negotiate a realistic repayment plan.
6. If the debtor does not pay, the collection agency takes legal action against the debtor.
7. The debt collection process is resolved when the debt is paid in full or settled in court.

If at any point in this process the debt collector violates the FDCPA, the debtor can report them to the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), or the U.S. Department of Justice (DOJ).

Does Debt Collection Affect Credit?

Debt collection has the potential to negatively affect your credit score. Debt collection agencies are within their rights to report your debt to credit reporting agencies. This will usually lower your credit score. How severely it is affected will depend on how large the debt is and how long it has been owed. The reporting of debt can affect your credit score for up to seven years. 

Debt Collector Harassment

Debt collectors have a legal right to make attempts to collect the money they are owed. However, as mentioned previously, the FDCPA governs exactly how they are allowed to do this, with harassment being strictly prohibited. Harassment includes any and all intimidation, abuse, coercion, or bullying directed towards the debtor. Harassment can be done through phone calls, text messages, emails, or in person. When a debt collector engages in harassment, the debtor can take legal action against them. However, this does not erase the debt, so you should be sure not to ignore a court summons or other legal documents related to the debt. 

Should You Pay a Debt Collection Agency?

There is no one-size-fits-all answer when it comes to whether or not you should pay a debt collection agency. First, you should ensure the debt is valid. Make sure that it does in fact belong to you and that the amount is correct. Next, consider that the negative impact to your credit score has likely already happened, and that paying the debt will not immediately improve your credit score. Also, consider that Pennsylvania has a statute of limitations of 4 years for legal action for most debts, with certain exceptions for debts “under seal” such as mortgages. This means that most creditors only have 4 years from your first missed payment to sue you. Finally, consider your financial situation. Do you have the money to pay the debt without sacrificing on basic needs like food and housing? If not, then paying the debt may not be in your best interest.  

How to Respond to Debt Collectors

When responding to debt collectors, you should first ensure the debt is valid. This means confirming that it is a debt you owe and for the correct amount. Keep a record of all communication with the debt collector. This will protect you later if they begin harassing you. However, the best thing to do is hire an experienced debt relief attorney. They can then respond on your behalf and help get your debt taken care of.