Having a debt in collections is an embarrassing experience. The last thing you want is for others to find out about your financial problems. While in some circumstances debt collectors can legally call your neighbor, this doesn't necessarily mean that those close to you will find out that you owe outstanding debts.
Facts
The Fair Debt Collection Practices Act dictates what actions a debt collector can and cannot take when recovering unpaid accounts. If a collection agency is unaware of your location, it has legal permission to call your friends and family in an effort to find you. The FDCPA restricts collection agencies to only telephoning friends and family members once, unless the company has a strong reason to suspect that the person it spoke with was deliberately concealing your location.
Considerations
It's highly unlikely that a debt collector would call your neighbor looking for you unless your neighbor is a close family member, such as a parent or sibling. If the collection agency knows that the individual is a neighbor, then it already knows your location and has no reason to telephone a third party looking for you.
Features
If a collection agency calls your neighbor looking for you, it cannot disclose any details about your debt. In addition, the debt collector making the call is legally prohibited from disclosing the company he works for unless your neighbor specifically asks who the call is from. Informing your neighbor that you owe a debt or disclosing how much you owe is considered harassment and is illegal.
Effects
The FDCPA gives debtors the right to file lawsuits against collection agencies that violate federal consumer protection laws. If a collection agency calls your neighbor when it already knows your location or provides your neighbor with any details about your debt, you may sue the company for up to $1,000 in damages. The FDCPA requires that you file any lawsuits against a collection agency within one year of the date the actual violation occurred.
Benefits
You can prevent a collection agency from contacting you, or anyone else you know, about your debt by sending the company a cease and desist notice through the mail. As soon as you provide the collection agency with a written request that it cease all contact with you, the FDCPA states that it can only contact you again to notify you of any specific remedies it intends to take when conducting collection activity. For example, if you send a cease and desist notice to the collection agency and it files a lawsuit against you several months later, it still has the right to notify you of the impending suit and give you the opportunity to pay your debt without going to court.
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