FDCPA stands for Fair Debt Collection Practice Act which is an act imposed by the Federal Trade Commission, also known as FTC.

Under FDCPA, there are certain things that collection companies and agencies can or cannot do. Section 802(e) of the FDCPA reads, “It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.”

Then Section 803(1) focuses on defining the debt collector. It states “The term ‘debt collector’ means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”

This  particular verbiage confirms that, if a person calls for someone other than the original creditor, or a payday loan lender, then that person is called a collector and will be subject to the FDCPA. If that  caller harasses or threatens borrowers, then that person is violating the law and his or her firm will be subject to a lawsuit as that person is violating the FTC Fair Debt Collection Practices Act.

However according to the FDCPA section 803(6)(A) and (B), employees of the original creditor or lending institutions that includes a payday loan lender, are exempt from its provisions unless they collect the debt under a different name. For example, if the original creditor is Solomon Finance and if their collection department calls under that name, then the FDCPA guidelines will not apply to them as they will be considered the original creditor not a thirty party agency.

But if customer gets a payday advance from Cash USA but that company uses the name Bills Money when attempting to collect debts, then the FDCPA applies.

In summary, the FDCPA does not apply to original payday lenders or other creditors as long as they collect their own debt under their own name. However, for various reasons, many creditors and payday lenders end up dealing with third party agencies, which in that case, the FDCPA would apply.