Debt collection can easily overwhelm debtors, especially when keeping track of payables. If you are in Arizona, know that there are safeguards in place to protect you. Here is a guide to help you deal with debt collectors, collection agencies, and debt buyers:
Who Are the Key Parties Involved in Debt Collection?
Debt Collectors
These are individuals or entities hired to collect debts on behalf of creditors. They reach out to consumers to recover unpaid debts, such as:
- credit card balances
- medical bills
- personal loans
Debt collectors in Arizona are governed by local and state regulations. They must follow the federal Fair Debt Collection Practices Act (FDCPA) and Arizona’s Consumer Protection Laws (e.g., A.R.S. § 44-1521 under the Arizona Consumer Fraud Act).
Collection Agencies
Some companies specialize in collecting debts for other businesses. They often work on a commission basis, earning a percentage of the amount they recover. In Arizona, they must be licensed under A.R.S. § 32-1001 (Arizona Collection Agency Act). The Arizona Department of Financial Institutions (AZDFI) regulates the operations of these agencies.
Debt Buyers
Debt buyers purchase delinquent debts from original creditors at a fraction of the debt’s value. Once they own the debt, they attempt to collect the full amount from the consumer. Note that debt buyers are not always subject to FDCPA, but they must adhere to the same regulations as other debt collectors.
Your Rights Under the Law
Arizona residents are protected by both federal and state laws that regulate debt collection practices.
Federal Protections
The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits debt collectors from using abusive, unfair, or deceptive practices. Under the FDCPA, debt collectors must:
- Provide a written notice within five days of first contacting you, detailing the amount owed, the name of the creditor, and your right to dispute the debt.
- Cease communication if you send a written request asking them to stop.
- Avoid contacting you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., or at your workplace if you’ve informed them it’s not allowed.
- Refrain from using threats, obscene language, or repeated calls intended to harass.
State Protections
Arizona requires licensing for debt collectors. The state also enforces laws that align with the FDCPA, protecting consumers from unethical collection practices. Thus, if a debt collector violates these laws, you can report them to the Arizona Attorney General’s Office.
Statute of Limitations for Debt Collectors
The statute of limitations is the time frame within which a creditor or collector can legally sue you to collect a debt. In Arizona, this time frame varies depending on the type of debt:
- Written Contracts (including credit cards): 6 years (see A.R.S. § 12-548)
- Oral Contracts: 3 years (see A. R. S. § 12-543)
- Auto Loans: 4 years
- Medical Debts: 6 years
- State Tax Debts: 10 years
Note however, that paying up a debt or admitting that you owe it will restart the above-mentioned time frames. Moreover, even if the statute has expired, collectors may still attempt to collect the debt, but they can’t legally sue you for it.
How to Handle Debt Collection Attempts
Request Validation: If a debt collector contacts you, request a written validation of the debt. They are required to provide details about the debt, including the amount owed and the original creditor.
Check Licensing: Verify if the collection agency is licensed in Arizona via AZDFI’s website.
Dispute the Debt: If you believe the debt isn’t yours or the amount is incorrect, you have the right to dispute it. Send a written dispute within 30 days of receiving the validation notice.
Keep Records: Document all communications with debt collectors. Keep copies of letters, emails, and notes from phone conversations.
Seek Help: If you’re overwhelmed, consult with a consumer rights attorney. Also, a reputable credit counseling service can help you handle a debt collection situation.
Know When to File a Complaint: Report violations to:
- AZ Attorney General’s Office
- Consumer Financial Protection Bureau (CFPB)
- Federal Trade Commission (FTC)
Beware of Scams
Unfortunately, not all individuals claiming to be debt collectors are legitimate. Be cautious of collectors who:
- Refuse to provide written validation of the debt.
- Threaten you with arrest or legal action without proper documentation.
- Demand immediate payment without giving you time to consider your options.
What to Watch Out For
| Red Flag | Meaning | What to Do |
| A collector refuses to validate the debt | Likely a scam or a violation | Send a written dispute letter |
| You’re being sued on a very old debt | Possibly beyond statute of limitations | Raise a time-barred defense |
| Debt buyers don’t have proper documentation | May not be legally collectible | Request proof of chain of title and original contract |
If you suspect a scam, report it to the Arizona Attorney General’s Office and the Federal Trade Commission.
Remember, understanding your rights and the laws governing debt collection in Arizona can help you protect yourself from abusive debt collectors. However, taking responsibility for your debts is still the best thing that you can do to manage your financial situation.
