If a borrower defaults on a short-term cash advance, third-party collection agencies must strictly adhere to the Fair Debt Collection Practices Act (FDCPA).
1. Critical FDCPA Statutory Safeguards
- Prohibited Calling Hours: Collectors cannot contact consumers before 8:00 AM or after 9:00 PM local time.
- Workplace Contact Bans: Collectors must immediately cease calling an employer once notified that the employer prohibits personal calls.
- Harassment & Threat Prohibitions: Falsely threatening arrest, criminal prosecution, or immediate wage garnishment without a court judgment is a federal violation punishable by statutory damages up to $1,000 plus attorney fees.
- Federal Wage Garnishment Limits (CCPA Title III): Wage garnishment cannot exceed the lesser of 25% of disposable earnings or the amount by which weekly earnings exceed 30 times the federal minimum wage ($217.50/week).