Debt collection laws in Iowa are designed to protect consumers from unfair, fraudulent, deceptive, and harassing debt collection practices. While there are a number of laws that may be helpful to consumers dealing with debt, the Iowa Fair Debt Collection Practices Act and the Fair Debt Collection Practices Act (FDCPA) typically are the two laws that consumers turn to when they are being contacted by debt collectors or collection agencies.
We want to provide you with more information about both state and federal debt collection laws, and to explain the protections they provide to consumers.
Understanding How Fair Debt Collection Laws Work
Both the Iowa Fair Debt Collection Practices Act and federal FDCPA provide a number of protections to consumers who have unpaid debts. The FDCPA covers most types of consumer debts, including both secured and unsecured debt such as credit card debt, medical debt, student loan debt, mortgage debt, and auto loan debt. While debt collectors are allowed to contact consumers by written letter, email, phone, and text message, there are legal limits to those forms of communication.
The FDCPA requires debt collectors to give you a “validation notice” within 5 days of initially contacting you. As the Federal Trade Commission (FTC) explains, that validation notice must provide you with the following information in writing:
- Amount you owe;
- Name of creditor to whom you owe the debt; and
- What you can do if you do not believe it is your debt.
The FDCPA prohibits debt collectors from doing any of the following:
- Harassing you, including threatening you with harm, using obscene or profane language, or repeatedly calling in order to annoy you;
- Lying to you, including misrepresenting your debt or the amount in any way, pretending to be a lawyer or a government representative, telling you that you will be arrested, or informing you of any other actions that will be taken against you when those actions cannot actually happen; and
- Treating you unfairly, including attempting to collect interest or fees beyond what you owe under your contract, depositing a post-dated check early, or taking your property when it is unlawful.
The Iowa Fair Debt Collection Practices Act provides similar protections to consumers, and expressly prohibits a debt collector from engaging in practices that involve threats, coercion, oppression, harassment, or abuse. Generally speaking, Iowa state law may provide broader reaching protections to consumers, and it is important to speak with a lawyer about filing your claim under state or federal law.
When Debt Collectors Can Restart the Statute of Limitations on Time-Barred Debt
Debt collection law also involves time limits on certain debt collection tactics. In some cases, debt collection companies have purchased debt that has become time-barred. This means that, even though you still owe the debt, you cannot face a lawsuit over the debt. In other words, you cannot be sued to collect the debt if a certain amount of time has passed. Debts have a specific statute of limitations, which is a time window that typically begins “ticking” when the consumer incurs the debt.
One of the most damaging things you can do if a representative from a collection agency contacts you is to say anything that can restart the statute of limitations on your debt. Accordingly, you should avoid all of the following if you are contacted by a collection agency about a time-barred debt:
- Acknowledging that you owe the debt;
- Agreeing to a payment plan;
- Making any payments;
- Using the account on which you owe the debt; or
- Accepting a settlement offer from the collection agency.