An Overview of Indiana Debt Collection Laws
The primary purpose of the Law of Debtor and Creditor in Indiana is to establish a fair system of collecting debts while protecting individuals from aggressive collections. The state of Indiana has extensive regulations addressing both creditor and debtor rights, as well as rogue debt collection companies and their actions. More explicitly, the laws protect consumers against harassment, abuse, and any type of unfair practices by debt collection agencies. Indiana laws are supplemented by federal guidelines, such as the Fair Debt Collection Practices Act, or FDCPA (15 US Code 1692). Both federal and Indiana debt collection laws aim to provide guidance to individuals and businesses on how they can appropriately collect their debts or that of their clients while limiting the actions of rogue debt collectors. These laws also offer remedies to those subject to unfair practices by unethical debt collectors .
Like many other states, the Indiana Debt Collection Laws seek to restrict unfair conduct by debt collection companies. For instance, debt collectors cannot deceptively use threats or foul language and they may not engage in actions that could result in a breach of the peace. This is important because in some cases, a debt collector might falsely threaten to take legal action when they do not intend to or when they do not actually have a legal right to take an action. The laws also prohibit individuals from misrepresenting the debt to the consumer, including the amount and the terms of repayment. Furthermore, the Indiana Debt Collection Act prohibits debt collectors from directly contacting an individual’s employer prior to receiving a written notice from the creditor that it is okay to send a letter to the employer.
Permissible Debt Collection Practices
Under Indiana law, debt collectors can pursue payment on your debt through several different methods. Collectors may contact you in person, by phone, through the mail, or in some circumstances, even via email or text message. Most are required to provide written communication upon your first contact, informing you of the amount owed, the name of the creditor, and your right to dispute the debt.
A debt collector may call you at work, as long as that work is not your only place of employment and, crucially, provided that your employer has not prohibited such calls. Friendship or relationship calls are also not ordinarily actionable.
However, under Indiana law, several other prohibited practices exist for which you can certainly sue for damages:
• Threatening violence or use of obscene language
• Using deception to collect on your loan or credit balance
• Implying the threat of arrest or physical harm
• Demanding that you pay more than the actual amount owed, plus attorney fees and collection costs
• Attempting to collect a non-existent debt
• Depositing a post-dated check prematurely
• Calling at inconvenient times (those not appropriate or convenient for you) or consistently calling, with the intent to annoy or harass you
• Using your social security number for any purpose other than for record identification
What Debt Collectors Cannot Do
There are several common debt collection practices that are prohibited in Indiana. These fall into three general categories: harassing debtors, deceptive practices, and tangible harm to debtors. Harassing debtors is the top concern for both Indiana authorities and the federal government. A complaint received by the Federal Trade Commission (leading to an investigation) cites a debt collector who continues to phone a debtor at all times of day, weeks after being informed to not contact the debtor anymore. Other collectors harass debtors at their place of employment, or even show up at their houses/bank locations.
Since these practices are illegal under state and federal laws, the state of Indiana has a process for reporting these collectors, which can lead to a fine by the Consumer Protection Division of the Indiana Attorney General’s Office. This highlights the need for a debtor to understand how to approach these reports as they are often hesitant to act due to fears of retaliation or a lack of understanding of the process. A deceptive practice is one where a debt collector has been caught lying about information. For example, a collector posing as an official representative of a law firm would be a deceptive practice. These practices are further bundled with other unapproved means of collecting debt. That means that displayed violence, or even the making of false threats to the debtor, are also considered deceptive practices. It is not only deceptive practices, but also any direct and malicious harm to a debtor. For instance, if a collector were to call a debtor’s employer, reveal personal information about the account and cause an embarrassing scene, it would be deemed into this category. Pain and suffering damages for harassment and invasion of privacy can be awarded in court, but there are additional protections afforded to debtors. A debtor may recover $1,000 in addition to any damage calculated from the perceived damage.
Your Rights Under the Law
Should you be subject to harassment from a debt collector, Indiana law affords you consumer rights and protections. For instance, you have the right to dispute any debt that is collected by the debt collector. My collection attorneys can assist you in contesting a third party’s collection actions.
Indiana code 24-5-0.5-1 makes clear that when at least one of the documents that the debt collector will use to allege the existence of a debt is a copy of a contract or another legally operative document containing the terms or conditions of the debt, a debt collector shall send notice of the communication to the debtor. The notice shall include the same information contained in any written communication sent by the debt collector to the debtor not later than thirty (30) days after the communication.
The notice must include all of the provisions described in 15 U.S.C. 1692g(a) as well as the following:
- (1) The name and address of the debt collector;
- (2) The name and address of the original creditor;
- (3) All relevant agreement information in support of the collection;
Your Indiana consumer rights allow you to dispute the communication by either writing back to the debt collector, calling the debt collector, or both. It is important that you not ignore this process. If you do ignore this process, you could jeopardize your legal rights with respect to the debt collector. For instance, if the debt collector later sues you for the money alleged to be owed, you may have issues with respect to any defenses you have or even worse, if the debt collector all together takes judgment against you. If the debt collector obtains judgment against you by default, the collector could then proceed to garnishment or execution against you.
Other consumer rights include the requirement that the debt collector provide you a required 30 day notice via certified mail prior to taking any other legal action against you to collect a bad debt. Also, the debt collector must disclose all details of the alleged debt to you within 30 days of obtaining the debt.
The Role of the Indiana Attorney General
The Consumer Protection Division of the Indiana Attorney General’s Office plays a monumental role in enforcing Indiana debt collection laws. It handles consumer complaints, conducts investigations, and takes legal action against credit providers who violate the law. An examination of the Attorney General’s Office website makes clear that an important focus is consumer complaints. Those complaints are often against a collection agency. The website states: The Consumer Complaint Division responds to approximately 40,000 written complaints each year. Complaints are accepted regarding services provided by businesses that operate in or conduct business in Indiana. This Division will investigate your complaint and seek to resolve the case by communicating with the business and mediating a solution.
If a consumer complaint involves a debt collector or collection agency, it is commonly investigated by the Attorney General’s Debt Collection Practices group. The Attorney General’s website states the following: The Department of Consumer Protection investigates consumer complaints regarding the business practices of debt collectors. The Debt Collection Practices Section: 1) investigates and responds to complaints against debt collection companies; 2) receives and responds to consumer complaints of unfair collection practices; and 3) conducts debt collection seminars to assist the public in understanding their rights and responsibilities under the FDCPA and DCPA. Debt Collection Seminars entertain from 10 to 20 participants per session and accommodate participants with limited reading or English comprehension by making the program’s outline available in Spanish and in plain English.
Furthermore , the Attorney General’s website goes on to explain how it handles consumer complaints about a debt collector when a violation of the law is established: When our investigations do not reveal multiple violations of the FDCPA or DCPA, the Division sends individual letters of complaint on behalf of the consumers to licensed credit professionals. The letters request corrective action from the respondent, provide copies of consumer records, and request a written response. The letters include attachments of the appropriate FDCPA and DCPA code sections, as well as relevant case law, and a chart of the violations it has identified. A follow-up inquiry is conducted within two to four months to request compliance with the FDCPA and DCPA as to all consumers. In cases where an individual’s response fails to accurately describe business practices which are inconsistent with those represented in the initial complaint, or individuals refuse to correct, or provide conflicting evidence of corrective actions, the Division prepares a case file to be reviewed by the top legal officer in the Department. If the action is found to violate the FDCPA and/or DCPA the top legal officer authorizes the filing of civil lawsuits.
As you can see, the Indiana Attorney General’s Office has the ability and motivation to prosecute violations of Indiana debt collection and consumer protection laws.
Filing a Complaint Against a Debt Collector
The next step in the process for Indiana consumer debt collection is to file a complaint against the debt collector. One of the most important aspects of this scenario is the requirement that you keep thorough documentation of the wrongful act committed by the collector. This includes all communications by phone, letter or email. You will need to fill out a complaint form. This can typically be found on the website of your state’s Attorney General.
As for the filing of your complaint, you will need to do this via mail after first filling out the complaint form. In addition to the complaint form, you will need to send along a copy of all of the extra documentation you have collected. This helps to support your case. For all of the letters and emails that you have sent to the collector, be sure to send along copies versus the originals. With regard to phone calls, it is best to list the date and time of the call. Include the person with whom you spoke and the content of the conversation.
If you have been contacted by the debt collector at home, include a copy of that communication as well. To help establish the harassment by the debt collector, include a log of your conversations with that entity. State the date, time and content of the call.
Additional Resources for Indiana Consumers
Consumer protection is an important part of the Indiana Legal Aid Society’s mission. Indiana Legal Aid Society helps over 20,000 low-income Hoosiers each year. Need help with a debt collection problem? Here are resources…
The Consumer Financial Protection Bureau has comprehensive information for consumers on what to expect from the credit card market and how to file a complaint.
Indiana Consumer Protection Division — The primary mission of the Attorney General’s Consumer Protection Division is to advocate for Hoosiers by educating and empowering people and working with businesses to responsibly promote sound marketplace practices that will benefit consumers and businesses alike in Hoosier communities.
Consumer Assistance Program (CAP), Indiana Office of the Attorney General — CAP helps Indiana residents with consumer complaints and answers general questions about consumer protection laws and programs.
Indiana -IN.gov Search. You may search any of the main agencies, departments, boards and commissions.
Indiana State Bar Association "Lawyer Finder Program"
Indiana Senior Consumer Hotline – 1-800-992-6978 – The Senior Consumer Hotline provides free consumer information and assistance to older Hoosiers and their caregivers. Questions addressed include: identity theft, scams, auto sales, telemarketing practices, home repairs, loans and debt collection questions.
Indiana Legal Services – provides free civil legal services to low-income residents of Indiana.
Indiana Legal Aid Society – provides free legal assistance , legal education and representation to low-income individuals and families struggling to make ends meet.
Find Free Legal Aid Programs in your community by ZIP code or county.
Immigrants’ and Refugees’ Rights to Legal Representation
Military & Veterans’ Services
Senior Citizens’ Rights to Legal Representation
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Filing a Complaint Against a Debt Collector
The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) filed a joint amicus brief with the U.S. Supreme Court, urging the Court to grant the petition filed by the Conference of State Bank Supervisors (CSBS) in the case of CFPB v. CFSA, et al. The amici argued that the petitioners, lenders licensed by state regulators, do not have a private right of action to challenge the constitutionality of the CFPB’s structure. The amici claimed that the state regulators have plenty of tools to enforce consumer protection laws, including enforcing states’ usury laws, without substituting the CSBS for the CFPB as the regulators responsible for enforcing federal law. They also noted that, in its original 2010 request for comment, the CFPB did not propose imposing federal law on duly-licensed lenders. Thus, there is no good reason to allow those lenders to overrule state regulators and make state usury laws unenforceable in court.
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