The Maryland Consumer Debt Collection Act
Abusive debt collection practices can contribute to personal bankruptcies, employment and marital instability, invasion of privacy, mental anguish and emotional distress. Even in times of economic prosperity, it may be difficult to meet certain financial obligations due to a sudden loss of income, coping with a catastrophic injury, or other adverse situations. Maryland is one of the few states with laws to curb unfair and abusive debt collections practices.
The Maryland Consumer Debt Collection Act ("the Act")1 provides recourse to Maryland consumers whose rights under the Act have been violated. Please be advised that the Act does not apply to any commercial transaction or transactions entered to carry on a business interest. Also, the collection of certain obligations owed to a state or the federal government may preempt the law. Under the Act, a collector who violates any provision of the Maryland law is liable for damages proximately caused by the violation, including damages for emotional distress or mental anguish suffered with or without accompanying injury.
"Knowledge is the first step in protecting yourself."
Understanding your rights is the first step in protecting yourself from abusive debt collection practices.
Types of debts covered under the law: Consumer transactions involving a person seeking or acquiring real or personal property, services, money or credit for personal, family, or household purpose.
Types of individuals subject to the law: Any person collecting or attempting to collect an alleged debt arising out of consumer transaction. This includes creditors and or any person hired as an employee of the creditor, and third party collection organizations and attorneys who collect debts for another.
Types of collection acts prohibited: In collecting or attempting to collect an alleged debt, a collector may not:
- Use or threaten force or violence.
- Threaten criminal prosecution, unless the transaction is a violation of a criminal statute.
- Disclose or threaten to disclose any information which affects your reputation for credit worthiness with knowledge that the information is false.
- Contact your employer with respect to a delinquent indebtedness before obtaining a final judgment against you.
- Disclose or threaten to disclose to a person other than yourself, or your spouse (or parent if the debtor is a minor) information which affects your reputation, whether or not for credit worthiness, with knowledge that the other person does not have a legitimate business need for the information.
- Communicate with you or a person related to you at unusual hours or in any other manner as reasonably can be expected to abuse or harass you.
- Use obscene or grossly abusive language in communicating with you or a person related to you.
- Claim, attempt, or threaten to enforce a right with knowledge that the right does not exist.
- Use a communication which simulates legal or judicial process or gives the appearance of being authorized, issued or approved by a government, government agency or lawyer when it is not.
Liability for damages under the law: A collector who violates any provision of the Maryland law is
liable for damages proximately caused by the violation, including damages for emotional distress or mental
anguish suffered with or without accompanying injury.
Suggestions For Communicating with Creditors
Communications with Creditors: A creditor has the right to pursue the collection of any money or personal property according to the terms of the agreement. The creditor may also employ the services of collection agencies and attorneys to collect the debt.
The following suggestions may be helpful when discussing the repayment of a delinquent debt with your creditor:
- Maintain contact with your creditors. Advise them of your situation and intentions. Avoiding contact with your creditor may only result in increased or aggressive collection activity.
- Avoid any promise to make payments that you are unable to make or have no intention of making.
- Inquire from your creditor if the terms of your agreement can be re-negotiated or if payments can be restructured.
Remember to get it in writing!
- Avoid taking the collection of your debt personally. Treat it as a business transaction in which you are responsible for repayment.
- Attempt to discuss the problem with management if you are unable to communicate with collectors assigned to your account.
- Advise your creditor by certified mail, return receipt requested, of your particular situation if you are unable to communicate with the creditor by telephone, or you are prohibited from receiving calls at your place of employment.
"Time-Barred" Debt: The Impact of Relevant Statute of Limitations on a Particular Debt
Some general considerations about statutes of limitations:
- The Statute of Limitations may be Based on the Original Contract and may Vary Depending on the Type of Contract and Contract Language
It is necessary to understand that the applicable statute of limitations for a particular debt may not be based on where a consumer resides or where a legal action is brought; instead, the applicable statute of limitations might be based on the language of the original contract (such as a credit card agreement); the original contract typically specifies which state's laws apply. Thus, even if you live in Maryland, a particular obligation may be based, for example, on the laws of Nevada, South Dakota, or Delaware, or whatever state is specified in the original contract. However, there are other factors which could also impact which state's laws (including the applicable statutes of limitations) apply to a particular agreement.
Next, the length of a particular state's statute of limitations may vary depending on the type of contract at issue and on specific language in the contract. For example, if a debt arises under Maryland law, depending on the original contract, the applicable statute of limitations could be 3 years, or could be 4 years, or could be even 12 years.
- The Impact of the Relevant Statute of Limitations on a Particular Debt is Complicated
If you have any questions about the statute of limitations for a particular debt, you should consult an attorney.
The Impact of Statute of Limitations on Collections
- Even if a specific debt is older than the length of the applicable statute of limitations, a debt collector is still normally permitted to attempt to collect on that debt as long as they do not file or threaten to file a legal action in court.
- Thus the statute of limitations impacts how a collection agency can go about collecting a particular debt; it does not necessarily preclude a collection agency from attempting to collect on that debt.
Where you can find help
Most state and local government offices investigate written complaints from consumers and may take an action against violators of the Maryland Consumer Debt Collection Act. Some may also provide mediation services and assist in resolving disputes between consumers and creditors. The following is a list of state and county consumer protection offices where you may find help:
The Commissioner of Financial Regulation
500 North Calvert Street, Suite 402
Baltimore, Maryland 21202-2272
Toll free: 1-888-784-0136
Consumer Protection Division
Office of The Attorney General
200 St. Paul Place, 16th Floor
Baltimore, Maryland 21202-2021
TDD (410) 576-6372
The Maryland Collection Agency Licensing Board
500 North Calvert Street, Suite 402
Baltimore, Maryland 21202-2272
(410) 333-3866 Fax
Howard County Office of Consumer Affairs
6751 Columbia Gateway Drive
Columbia, Maryland 21046
(410) 313-6453 Fax
Montgomery County Office of Consumer Affairs
100 Maryland Avenue, 3rd Floor
Rockville, Maryland 20850
The Federal Trade Commission (FTC) also enforces consumer rights in the
Fair Debt Collection Practices Act
(FDCPA), which describe those activities a collection agency is prohibited from practicing. For violations of the FDCPA please visit the
FTC website, or contact the agency at 800-382-4357.