Debt collection laws in California

Federal debt collection laws

The Fair Debt Collection Practices Act (FDCPA) is a federal debt collection law that affords all Americans certain rights when unpaid debts are being pursued by bill collectors.

This act prohibits debt collectors from using deceptive or abusive debt collection practices, such as contacting you at odd hours, calling you repeatedly or making false threats regarding legal actions they plan to take. Debt collectors are also barred from revealing the existence of unpaid debts to other parties, both on social media and through direct forms of communication.

According to the Consumer Financial Protection Bureau (CFPB), the FDCPA requires debt collectors to contact your attorney instead of reaching out to you personally if you have legal representation already in place.

Also, note that the FDCPA lets you stop all contact from debt collectors by informing them in writing that you do not want to receive communications any longer. If the debt collector continues its communications, you can sue them under the FDCPA and receive coverage of your legal fees as well as damages.

» MORE: How to handle bill collectors

California debt collection laws

According to the state of California, many of the same laws and regulations afforded in the FDCPA were incorporated into the California Fair Debt Collection Practices Act (CFDCPA) at the state level.

Debt collection practices

According to California state debt collection laws, bill collectors of all kinds cannot do the following:

• Communicate with you at unusual times or places
• Disclose communications or debt issues to third parties
• Advertise your existing debt to third parties
• Share defamatory information about you
• Use physical force or criminal means to collect on a debt
• Misrepresent their identity to you
• Use deceptive stimulation
• Pretend to be a collection agency if representing the creditor
• Misrepresent affiliation with other third parties
• Falsely represent details about the debt
• Misrepresent legal procedures while attempting to collect a debt
• Make deceptive statements or threats
• Threaten to increase unpaid charges
• Use profanity or obscene language
• Communicate with your employer or family member outside of approved instances (e.g., communicating with an employer to verify your employment or garnish your wages)
• Communicate with you about your debt when they know you have legal representation
• Call you before 8 a.m. or after 9 p.m.

Statute of limitations

In the state of California, debt collectors have four years to sue you for unpaid bills. This timeline represents the statute of limitations on debt in the state, after which the debt becomes "time barred."

This doesn't mean a debt collector will stop trying to collect on a debt, however. It only means enough time has passed that debt collectors and agencies can no longer legally pursue unpaid debts in court.

Licensing and registration

A debt collector in California can be “any person who, in the ordinary course of business, regularly, on behalf of himself or others, engages in ... the collection of consumer debts.”

All debt collectors in the state are required to be licensed in California based on regulations set forth in the Debt Collection Licensing Act of 2022.

Required notices to debtors

In the state of California, creditors collecting debts and debt collection agencies must provide you with the following information:

• Disclosure of purpose of contact required at first contact
• Written verification notice required within five days after initial contact

In the written verification, a debt collector must disclose the amount of the debt, including charges and fees, contact information for the original creditor and your opportunity to dispute all or part of the debt.

Consumer rights

Debtors in California have the right to dispute a debt if they believe it's not theirs, or for any other reason, for 30 days after receiving written notice about the debt. At that point, the debt collector will provide you with verification of the debt, including a copy of the original bill or other evidence.

When a debt collector receives a response from you that you are disputing the unpaid debt, the collector is legally required to report this information to the credit bureau that is reporting the adverse information.

California residents also have the right to stop all communications from debt collectors — which can relieve some of the stress, but keep in mind it will not make the debt go away. The request must be made in writing and the bill collector is legally required to comply. After the request for no further contact, debt collectors can only send communications to you in a few specific situations, such as if a lawsuit has been filed to collect on the debt.

Enforcement and penalties

If you believe a debt collector has violated your rights in the state, the California Department of Financial Protection and Innovation (DFPI) says you have the right to file a complaint with any or all of the following:

• DFPI
• California Attorney General’s Office
• Consumer Financial Protection Bureau
• Federal Trade Commission

California residents can also sue debt collectors for violating their rights under the FDCPA in the state, although lawsuits must be filed within a year of the violation. The lawsuit can lead to damages being paid by the debt collector, as well as additional damages worth up to $1,000 for each violation proved.

» MORE: How to get out of debt

Bottom line

Residents in California are protected from harassment, threats and deceptive practices by debt collectors under both federal and state law. Californians can even stop debt collectors from contacting them altogether with a written notification, which can buy them some time and space to figure out next steps.

If you're drowning in debt in California, however, you should know that you can be sued and face other consequences like wage garnishment. Your best bet is figuring out a way to deal with unpaid debts head-on, such as by working with a nonprofit credit counselor, before you let it get to that point.