On the federal level, the Fair Debt Collection Practices Act protects consumers from certain debt collection practices and sets rules that debt collectors must follow, notes the Federal Trade Commission. Several states have their own debt collection laws, such as the Illinois Collection Agency Act, which requires debt collectors to have licenses, and sets rules about how they communicate with debtors, states Nolo.
The Fair Debt Collection Practices Act covers accounts such as personal credits cards, medical bills, auto loans and mortgages, and the Federal Trade Commission enforces its provisions, notes the agency. There are several requirements for debt collection under the act, including that debt collectors place calls after 8 a.m. and before 9 p.m,, and that they stop calling people at work if they are told to do so.
People who act as debt collectors, such as collection agencies and lawyers who collect debts on a regular basis, cannot engage in practices that are abusive, unfair or deceptive, such as using threats of harm or obscene language to collect debts, according to the Federal Trade Commission. They are also prohibited from threatening arrest or confiscation of property unless it is allowed under state law.
In addition to Illinois, several other states have laws protecting consumers from debt collectors, such as the California Fair Debt Collection Practices Act, the Georgia Industrial Loan Act and the Iowa Consumer Credit Code, states Nolo.