Payday Loans

Is It Legal For Payday Loan Debt Collection Agencies To Share The Debtor’s Information With Third Parties?

Though it is not exactly legal for payday loan debt collection agencies to share your information with third parties, things depend very much on the privacy policy of your payday lenders, which explains when and what types of information can be shared. It is very important for you to understand that the privacy policy may vary significantly from one lender to another. In general, as per Federal Privacy Act, lenders are prohibited from disclosing your personal details with third parties, but they can share many other pieces of information if their privacy policy allows the same. However, if it is not your lender but a third-party collection agency that is trying to collect the debt, the Fair Debt Collection Practices Act applies.

Fair Debt Collection Practices Act

It is very important for you to keep in mind that the Fair Debt Collection Practices Act applies only to payday loan debt collection agencies, not to payday lenders. A debt collector is a third party that is hired by your lender to collect the debt from you. Though it might be legal for a payday loan company to share your details with other parties in the process of debt collection, it is illegal for a collection agency to disclose your information to third parties. They can contact you through phone, emails and letters. They can even make personal visits to your home or office. But, if you request them in writing that you do not want them to give you a call or make any sort of communication while you are at office, they must honor your request. In fact, you even have the legal right to ask them to stop contacting you by any means at all, neither at home nor at office. Such requests must be made in writing and it is mandatory for collection agencies to follow those requests. Payday debt collectors must not harass you in any way. For example, even if you have not made any request to stop communication, they must not disturb you by giving late night calls. As per the laws, they should not contact you before 8 am and after 9 pm (your local time, not the time at the place where the office of the debt collection agency is located). Always remember, any sort of payday debt collection harassment is a criminal offence and you have the right to file complaints or even lawsuits against the

collection agency if they harass you.

What If Your Payday Lender Has Its Own Collection Department?

If you are being contacted by the collection department of your payday lender, not by any third-party payday loan debt collection agencies, your information may be shared and there may not be anything illegal about that. However, there are still a few basic things that you must keep in mind this regard. It is possible that your payday loan company has a collection department with a different name. For example, the name of the Payday loan company is XYZ but the name of the collection department is Debt Recovery XYZ. In such cases, the collection department will be legally treated as a third-party agency, not your lender; and therefore, they must abide by the laws imposed by the Fair Debt Collection Practices Act and must not share your information with other parties.

What If Your Lender Has Sold Your Loan Accounts To A Collection Agency?

Even if your payday loan accounts have been sold to payday loan debt collection agencies, the debt collectors do not legally become your lender; they are still a third party collection agency, and therefore, they must keep your debt and other information confidential.

Exceptions When Even Debt Collectors Can Share Your Information

There can be certain exceptions. For example, if the payday debt collection agent is having difficulty in locating you, they can enquire about you with third parties, such as your neighbors or employer. But even in that situation, they must not disclose non-public details, such as your social security number, your bank account number or the details about your debt. They can disclose as much information as is needed to locate you.

There can be another exception when you hire an attorney to handle the legal aspects of your debt problems. In such cases, the payday loan debt collection agencies can discuss even the non-public details about you with your lawyer.

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