Future Business Leaders of America (FBLA) Business Law Practice Exam

Which act regulates debt collection practices?

1. Fair Debt Collection Practices Act (FDCPA)

2. Consumer Protection Act

3. Credit Protection Act

4. Fair Credit Reporting Act

The correct answer is: Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is the primary legislation that regulates debt collection practices. Enacted in 1978, the FDCPA aims to eliminate abusive practices in the collection of debts and provides specific guidelines that debt collectors must follow when they engage with consumers. The Act restricts how and when collectors can contact consumers, prohibits deceptive and harassing behaviors, and grants consumers the right to dispute debts and request verification. The Consumer Protection Act, while essential for safeguarding consumer interests, covers a broader spectrum of consumer rights and does not specifically target debt collection practices. The Credit Protection Act is less recognized and may not encompass the detailed regulations surrounding collection methods. Finally, the Fair Credit Reporting Act focuses on the accuracy and privacy of information contained in consumer credit reports rather than the practices of debt collectors. Consequently, the FDCPA stands out as the legislation specifically tailored to govern debt collection activities.