The Fair Debt Collection Practices Act Gives You Some Debt Collection Practice Safeguards

August 10, 2025

Debt happens. Illness, job loss, unexpected expenses, or even simple oversight can cause bills to go unpaid. When debts go into collection, the calls and letters begin. The Fair Debt Collection Practices Act (FDCPA) is a federal law that gives you rights and protections when dealing with debt collectors. North Carolina also has its own laws that extend these protections. Knowing both can help you avoid scams, stop harassment, and manage debt responsibly.

Written notice of the debt

Within five days of first contacting you, a debt collector must send you written notice unless they have already provided it or you have paid the debt. This notice must include:

The total amount of the debt
The name of the current creditor
A statement that the debt is assumed valid unless you dispute it in writing within 30 days
A statement that if you dispute the debt in writing within 30 days, the collector will provide verification
A statement that if you request it in writing within 30 days, the collector will provide the name and address of the original creditor if different from the current one

Under North Carolina law, collection agencies must also be licensed by the NC Department of Insurance. You can verify a license at NC Department of Insurance.

Asking for collector information

You have the right to know who you are speaking with. Legitimate collectors must give their name, business address, and contact information. In North Carolina, they must also identify themselves as a debt collector at the start of the conversation. Verify them through the North Carolina Attorney General’s Office or a licensed collections database before paying.

Harassment is prohibited

Both federal and North Carolina law prohibit harassment by debt collectors. This includes:

Calling before 8 a.m. or after 9 p.m.
Using obscene or abusive language
Threatening arrest, physical harm, or other unlawful actions
Repeatedly calling to annoy or harass
Contacting third parties (other than your attorney, spouse, or credit bureau) about your debt

In North Carolina, contacting your employer about your debt without your consent is generally prohibited unless to verify employment or location.

Debt collection at your workplace

You can tell a debt collector not to contact you at work. Under NC law, once you do so, they must stop. They also cannot reveal your debt to coworkers or supervisors. If they visit in person, you or your employer can ask them to leave. Persistent visits can be reported as harassment to the NC Attorney General.

Payment plans and agreements

Collectors may offer payment plans. This can be a valid tool, but get all terms in writing and ensure you can afford the agreed amount. In North Carolina, collectors must provide a written confirmation of any settlement or payment plan before you send payment.

Only pay what you legally owe

Collectors cannot add interest, fees, or charges unless allowed by your original contract or state law. If the amount seems wrong, dispute it in writing within 30 days. Keep copies of all correspondence.

Choosing which debts to pay

If a collector holds multiple debts for you, you can choose which to pay. They cannot apply your payment to a disputed debt without your consent.

Credit reporting rules

Paying a debt does not erase it from your credit report if it is less than seven years old (or less than 10 years for some bankruptcies). However, paid debts should be marked “paid” or “settled” and will generally improve your creditworthiness over time. You can dispute inaccurate credit report entries at Annual Credit Report.

Debt lawsuits and judgments

Collectors can sue you in court to recover a debt. If they win, they may seek a judgment. In North Carolina, wage garnishment for consumer debts is generally prohibited, but bank account levies and property liens are possible. Even “time-barred” debts can be the subject of a lawsuit if you do not raise the statute of limitations as a defense.

Statute of limitations in North Carolina

Most debts in North Carolina have a three-year statute of limitations from the date of last payment or account activity. Exceptions include certain contracts under seal (10 years) and federal student loans (no limit). Making any payment can restart the clock. Collectors may encourage small “good faith” payments to revive old debts, be cautious.

Recognizing scams and fake debts

Red flags for debt collection scams include:

Demands for immediate payment without verification
Requests for payment via gift card, wire transfer, or cryptocurrency
Refusal to provide written notice
Requests for sensitive personal data like your Social Security number
Threats of arrest or law enforcement action

Report suspected scams to the NC Attorney General’s Consumer Protection Division at 1-877-5-NO-SCAM (1-877-566-7226).

Stopping collector contact

You can require a collector to stop contacting you by sending a written “cease communication” request (often called a drop-dead letter). Send it by certified mail or another trackable method. After receiving it, the collector may only contact you to confirm they will stop or to inform you of legal action.

Sample letters and templates

The Consumer Financial Protection Bureau provides sample letters to help you communicate with collectors:

Quick tips for North Carolina residents

Verify the collector’s license with the NC Department of Insurance
Request written proof of any debt before paying
Keep detailed records of all communications
Know North Carolina’s three-year statute of limitations on most debts
Never share personal information with unverified collectors
Report scams to the NC Attorney General’s Consumer Protection Division at 1-877-566-7226
Use certified mail or tracking for all correspondence
Seek legal help promptly if you receive a lawsuit notice

Understanding your rights under both the FDCPA and North Carolina law can help you handle debt collection confidently, avoid scams, and take control of your financial situation.