Unfair Debt Collection Laws

Both the North Carolina and Federal Government have enacted laws to protect “consumers” against improper and unfair conduct by debt collectors.   North Carolina actually offers protection under two different lines of statutes:

1) Chapter 58 involves the licensing of Collection Agencies and contains provisions prohibit unfair debt collection activity, and

2) Chapter 75 is the general NC Debt Collection Act. The restrictions under Chapter 58 are only enforceable against collection agencies, but apply to all “consumers” which includes individuals, corporations, and other companies.

The provisions of Chapter 75 essentially are enforceable against all persons attempting to collect on a debt, but only applies to individuals then only if the debt is incurred for personal, family, household or agricultural purposes. Generally speaking, the provisions of both NC statutes (and the Federal law for that matter) prohibit the following activities:

• Calling too often (more than once per day);

• Communicating after you notified the debt collector to stop in writing;

• Calling you at work after you notified the debt collector;

• Calling or otherwise communicating with your employer, family, friends or neighbors;

• Disclosing the debt to other people;

• Threatening you with jail or arrest if you fail to pay;

• Threatening to garnish your wages or seize assets when they are not entitled to do so (and garnishment is very rarely available in NC);

• Using profane or abusive language; and

• Suing and/or soliciting acknowledgment of an old debt (generally, more than three years old).

Violations of the NC laws result in penalties of $500 to $4,000 per violation (under both statutes). The Federal law involves penalties of $1,000 per violation. Attorney fees may also be recoverable.