North Carolina Debt Collection Laws
In addition to being regulated by the Fair Debt Collection Practices Act (FDCPA), North Carolina collection agencies are also regulated by North Carolina debt collection laws. Discover: North Carolina collection requirements, bad check laws (NSF), statutes of limitations for both debts and judgments, garnishments plus North Carolina collection agency license and bonding information.
Summary of the North Carolina fair debt collection practices laws:
NORTH CAROLINA INTEREST RATE
Legal: 8%
Judgment: 8%
NORTH CAROLINA STATUTE OF LIMITATIONS |in years|
Open Accounts: 3
Sale of Goods: 4
Written Contract: 3
Domestic Judgment: 10
Foreign Judgment: 10
NORTH CAROLINA BAD CHECK LAWS |NSF|
30 day written demand lesser of $500 or 3x check amount, but not less than $100.
NORTH CAROLINA WAGE GARNISHMENT EXEMPTIONS
100% of last 60 days’ earnings for family support. Garnishment only by political subdivisions for taxes, ambulance fees, etc.
NORTH CAROLINA COLLECTION AGENCY BONDING and LICENSING REQUIREMENTS
Bond: $5,000 to $50,000
License: Yes
Fee: $500
Exemption for out-of-state collectors: Contact state authorities. Unofficially, licensing authorities may allow out-of-state agencies to bypass requirements if they do not solicit in state and/or work for instate clients.
Below is the North Carolina debt collection statute:
Part 3. Prohibited Practices by Collection Agencies Engaged in the Collection of Debts from Consumers.
§ 58 70 90. Definitions.
As used in this Part, the following terms have the meanings specified:
(1) “Collection agency” means a collection agency as defined in G.S. 58 70 15 which engages, directly or indirectly, in debt collection from a consumer.
(2) “Consumer” means an individual, aggregation of individuals, corporation, company, association, or partnership that has incurred a debt or alleged debt.
(3) “Debt” means any obligation owed or due or alleged to be owed or due from a consumer. (1961, c. 782; 1971, c. 814, ss. 1 3; 1979, c. 835.)
§ 58 70 95. Threats and coercion.
No collection agency shall collect or attempt to collect any debt alleged to be due and owing from a consumer by means of any unfair threat, coercion, or attempt to coerce. Such unfair acts include, but are not limited to, the following:
(1) Using or threatening to use violence or any illegal means to cause harm to the person, reputation or property of any person;
(2) Falsely accusing or threatening to accuse any person of fraud or any crime, or of any conduct that would tend to cause disgrace, contempt or ridicule;
(3) Making or threatening to make false accusations to another person, including any credit reporting agency, that a consumer has not paid, or has willfully refused to pay a just debt;
(4) Threatening to sell or assign, or to refer to another for collection, the debt of the consumer with an attending representation that the result of such sale, assignment or reference would be that the consumer would lose any defense to the debt or would be subject to harsh, vindictive, or abusive collection attempts;
(5) Representing that nonpayment of an alleged debt may result in the arrest of any person;
(6) Representing that nonpayment of an alleged debt may result in the seizure, garnishment, attachment, or sale of any property or wages unless such action is in fact contemplated by the debt collector and permitted by law;
(7) Threatening to take any action not in fact taken in the usual course of business, unless it can be shown that such threatened action was actually intended to be taken in the particular case in which the threat was made;
(8) Threatening to take any action not permitted by law. (1979, c. 835.)
§ 58 70 100. Harassment.
No collection agency shall use any conduct, the natural consequence of which is to oppress, harass, or abuse any person in connection with the attempt to collect any debt. Such conduct includes, but is not limited to, the following:
(1) Using profane or obscene language, or language that would ordinarily abuse the typical hearer or reader;
(2) Placing collect telephone calls or sending collect telegrams unless the caller fully identifies himself and the company he represents;
(3) Causing a telephone to ring or engaging any person in telephone conversation with such frequency as to be unreasonable or to constitute a harassment to the person under the circumstances or at times known to be times other than normal waking hours of the person;
(4) Placing telephone calls or attempting to communicate with any person, contrary to his instructions, at his place of employment, unless the collection agency does not have a telephone number where the consumer can be reached during the consumer’s nonworking hours. (1979, c. 835.)
§ 58 70 105. Unreasonable publication.
No collection agency shall unreasonably publicize information regarding a consumer’s debt. Such unreasonable publication includes, but is not limited to, the following:
(1) Any communication with any person other than the debtor or his attorney, except:
a. With the permission of the debtor or his attorney;
b. To persons employed by the collection agency, to a credit reporting agency, to a person or business employed to collect the debt on behalf of the creditor, or to a person who makes a legitimate request for the information;
c. To the spouse (or one who stands in place of the spouse) of the debtor, or to the parent or guardian of the debtor if the debtor is a minor;
d. For the sole purpose of locating the debtor, if no indication of indebtedness is made;
e. Through legal process.
(2) Using any form of communication which ordinarily would be seen or heard by any person other than the consumer that displays or conveys any information about the alleged debt other than the name, address and phone number of the collection agency except as otherwise provided in this Part.
(3) Disclosing any information relating to a consumer’s debt by publishing or posting any list of consumers, except for credit reporting purposes. (1979, c. 835.)
§ 58 70 110. Deceptive representation.
No collection agency shall collect or attempt to collect a debt or obtain information concerning a consumer by any fraudulent, deceptive or misleading representation. Such representations include, but are not limited to, the following:
(1) Communicating with the consumer other than in the name of the person making the communication, the collection agency and the person or business on whose behalf the collection agency is acting or to whom the debt is owed;
(2) Failing to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector; provided, however, that this subdivision does not apply to a formal pleading made in connection with legal action;
(3) Falsely representing that the collection agency has in its possession information or something of value for the consumer;
(4) Falsely representing the character, extent, or amount of a debt against a consumer or of its status in any legal proceeding; falsely representing that the collection agency is in any way connected with any agency of the federal, State or local government; or falsely representing the creditor’s rights or intentions;
(5) Using or distributing or selling any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by a court, an official, or any other legally constituted or authorized authority, or which creates a false impression about its source;
(6) Falsely representing that an existing obligation of the consumer may be increased by the addition of attorney’s fees, investigation fees, service fees, or any other fees or charges;
(7) Falsely representing the status or true nature of the services rendered by the collection agency or its business. (1979, c. 835; 2001 269, s. 1.4.)
§ 58 70 115. Unconscionable means.
No collection agency shall collect or attempt to collect any debt by use of any unconscionable means. Such means include, but are not limited to, the following:
(1) Seeking or obtaining any written statement or acknowledgment in any form containing an affirmation of any debt by a consumer who has been declared bankrupt, an acknowledgment of any debt barred by the statute of limitations, or a waiver of any legal rights of the debtor without disclosing the nature and consequences of such affirmation or waiver and the fact that the consumer is not legally obligated to make such affirmation or waiver;
(2) Collecting or attempting to collect from the consumer all or any part of the collection agency’s fee or charge for services rendered, collecting or attempting to collect any interest or other charge, fee or expense incidental to the principal debt unless legally entitled to such fee or charge;
(3) Communicating with a consumer whenever the collection agency has been notified by the consumer’s attorney that he represents said consumer. (1979, c. 835.)
§ 58 70 120. Unauthorized practice of law; court appearances.
Neither a collection agency nor any representative thereof who is not a duly licensed attorney shall engage in the practice of law. As used in this section, “practice of law” includes the preparation of warrants or subpoenas. A collection agency’s representative is prohibited from appearing in court on behalf of a creditor except as required by court order or subpoena, and except to submit and explain claims in bankruptcy court. (1979, c. 835; 1989, c. 441, s. 11.)
§ 58 70 125. Shared office space.
The office of a collection agency shall not be shared or have a common waiting room with a practicing attorney or any type of lending institution. The office may be located in a private residence only if it is solely for business purposes, has an outside entrance and can be isolated from the remainder of the residence. (1979, c. 835.)
Part 4. Enforcement.
§ 58 70 130. Civil liability.
(a) Any collection agency which violates Part 3 of this Article with respect to any debtor shall be liable to that debtor in an amount equal to the sum of any actual damages sustained by the debtor as a result of the violation.
(b) Any collection agency which violates Part 3 of this Article with respect to any debtor shall, in addition to actual damages sustained by the debtor as a result of the violation, also be liable to the debtor only in an individual action, and its additional liability therein to that debtor shall be for a penalty in such amount as the court may allow, which shall not be less than one hundred dollars ($100.00) for each violation nor greater than two thousand dollars ($2,000) for each violation.
(c) The specific and general provisions of Part 3 of this Article shall constitute unfair or deceptive acts or practices proscribed herein or by G.S. 75 1.1 in the area of commerce regulated thereby. Notwithstanding the provisions of G.S. 75 15.2 and 75 16, civil penalties in excess of two thousand dollars ($2,000) for each violation shall not be imposed, nor shall damages be trebled for any violation under Part 3 of this Article.
(d) The remedies provided by this section shall be cumulative, and in addition to remedies otherwise available. Provided, that any punitive damages assessed against a collection agency shall be reduced by the amount of the civil penalty assessed against such agency pursuant to subsection (b).
(e) The clear proceeds of civil penalties imposed under this section in suits instituted by the Attorney General shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C 457.2. (1979, c. 835; 1991, c. 68, s. 2; 1998 215, s. 89(a).)
Article 2.
Prohibited Acts by Debt Collectors.
§ 75 50. Definitions.
The following words and terms as used in this Article shall be construed as follows:
(1) “Consumer” means any natural person who has incurred a debt or alleged debt for personal, family, household or agricultural purposes.
(2) “Debt” means any obligation owed or due or alleged to be owed or due from a consumer.
(3) “Debt collector” means any person engaging, directly or indirectly, in debt collection from a consumer except those persons subject to the provisions of Article 70, Chapter 58 of the General Statutes. (1977, c. 747, s. 4; 1989, c. 770, s. 15.)
§ 75 51. Threats and coercion.
No debt collector shall collect or attempt to collect any debt alleged to be due and owing from a consumer by means of any unfair threat, coercion, or attempt to coerce. Such unfair acts include, but are not limited to, the following:
(1) Using or threatening to use violence or any illegal means to cause harm to the person, reputation or property of any person.
(2) Falsely accusing or threatening to accuse any person of fraud or any crime, or of any conduct that would tend to cause disgrace, contempt or ridicule.
(3) Making or threatening to make false accusations to another person, including any credit reporting agency, that a consumer has not paid, or has willfully refused to pay a just debt.
(4) Threatening to sell or assign, or to refer to another for collection, the debt of the consumer with an attending representation that the result of such sale, assignment or reference would be that the consumer would lose any defense to the debt or would be subjected to harsh, vindictive, or abusive collection attempts.
(5) Representing that nonpayment of an alleged debt may result in the arrest of any person.
(6) Representing that nonpayment of an alleged debt may result in the seizure, garnishment, attachment, or sale of any property or wages unless such action is in fact contemplated by the debt collector and permitted by law.
(7) Threatening to take any action not in fact taken in the usual course of business, unless it can be shown that such threatened action was actually intended to be taken in the particular case in which the threat was made.
(8) Threatening to take any action not permitted by law. (1977, c. 747, s. 4.)
§ 75 52. Harassment.
No debt collector shall use any conduct, the natural consequence of which is to oppress, harass, or abuse any person in connection with the attempt to collect any debt. Such unfair acts include, but are not limited to, the following:
(1) Using profane or obscene language, or language that would ordinarily abuse the typical hearer or reader.
(2) Placing collect telephone calls or sending collect telegrams unless the caller fully identifies himself and the company he represents.
(3) Causing a telephone to ring or engaging any person in telephone conversation with such frequency as to be unreasonable or to constitute a harassment to the person under the circumstances or at times known to be times other than normal waking hours of the person.
(4) Placing telephone calls or attempting to communicate with any person, contrary to his instructions, at his place of employment, unless the debt collector does not have a telephone number where the consumer can be reached during the consumer’s nonworking hours. (1977, c. 747, s. 4.)
§ 75 53. Unreasonable publication.
No debt collector shall unreasonably publicize information regarding a consumer’s debt. Such unreasonable publication includes, but is not limited to, the following:
(1) Any communication with any person other than the debtor or his attorney, except:
a. With the written permission of the debtor or his attorney given after default;
b. To persons employed by the debt collector, to a credit reporting agency, to a person or business employed to collect the debt on behalf of the creditor, or to a person who makes a legitimate request for the information;
c. To the spouse (or one who stands in place of the spouse) of the debtor, or to the parent or guardian of the debtor if the debtor is a minor and lives in the same household with such parent;
d. For the sole purpose of locating the debtor, if no indication of indebtedness is made;
e. Through legal process.
(2) Using any form of communication which ordinarily would be seen or heard by any person other than the consumer that displays or conveys any information about the alleged debt other than the name, address and phone number of the debt collector except as otherwise provided in this Article.
(3) Disclosing any information relating to a consumer’s debt by publishing or posting any list of consumers, except for credit reporting purposes and the publication and distribution of otherwise permissible “stop lists” to the point of sale locations where credit is extended, or by advertising for sale any claim to enforce payment thereof or in any other manner other than through legal process. (1977, c. 747, s. 4; 1979, c. 910.)
§ 75 54. Deceptive representation.
No debt collector shall collect or attempt to collect a debt or obtain information concerning a consumer by any fraudulent, deceptive or misleading representation. Such representations include, but are not limited to, the following:
(1) Communicating with the consumer other than in the name (or unique pseudonym) of the debt collector and the person or business on whose behalf the debt collector is acting or to whom the debt is owed.
(2) Failing to disclose in all communications attempting to collect a debt that the purpose of such communication is to collect a debt.
(3) Falsely representing that the debt collector has in his possession information or something of value for the consumer.
(4) Falsely representing the character, extent, or amount of a debt against a consumer or of its status in any legal proceeding; falsely representing that the collector is in any way connected with any agency of the federal, State or local government; or falsely representing the creditor’s rights or intentions.
(5) Using or distributing or selling any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by a court, an official, or any other legally constituted or authorized authority, or which creates a false impression about its source.
(6) Falsely representing that an existing obligation of the consumer may be increased by the addition of attorney’s fees, investigation fees, service fees, or any other fees or charges.
(7) Falsely representing the status or true nature of the services rendered by the debt collector or his business. (1977, c. 747, s. 4.)
§ 75 55. Unconscionable means.
No debt collector shall collect or attempt to collect any debt by use of any unconscionable means. Such means include, but are not limited to, the following:
(1) Seeking or obtaining any written statement or acknowledgment in any form containing an affirmation of any debt by a consumer who has been declared bankrupt, an acknowledgment of any debt barred by the statute of limitations, or a waiver of any legal rights of the debtor without disclosing the nature and consequences of such affirmation or waiver and the fact that the consumer is not legally obligated to make such affirmation or waiver.
(2) Collecting or attempting to collect from the consumer all or any part of the debt collector’s fee or charge for services rendered, collecting or attempting to collect any interest or other charge, fee or expense incidental to the principal debt unless legally entitled to such fee or charge.
(3) Communicating with a consumer (other than a statement of account used in the normal course of business) whenever the debt collector has been notified by the consumer’s attorney that he represents said consumer.
(4) Bringing suit against the debtor in a county other than that in which the debt was incurred or in which the debtor resides if the distances and amounts involved would make it impractical for the debtor to defend the claim. (1977, c. 747, s. 4.)
§ 75 56. Application.
The specific and general provisions of this Article shall exclusively constitute the unfair or deceptive acts or practices proscribed by G.S. 75 1.1 in the area of commerce regulated by this Article. Notwithstanding the provisions of G.S. 75 15.2 and G.S. 75 16, in private actions or actions instituted by the Attorney General, civil penalties in excess of two thousand dollars ($2,000) shall not be imposed, nor shall damages be trebled for any violation under this Article. The clear proceeds of civil penalties imposed in actions instituted by the Attorney General shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C 457.2. (1977, c. 747, s. 4; 1983, c. 417, s. 1; 1985 (Reg. Sess., 1986), c. 802; 1991, c. 68, s. 1; 1998 215, s. 101.)
North Carolina Debt Collection Laws
Please note: North Carolina debt collection laws can change over time, and you need to consult with an attorney before you use this information.
North Carolina Debt Collection Laws
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