Your Rights Against Debt Collectors in Texas

Two statutes govern debt collection in Texas and they draw their boundaries around different people. The Texas Debt Collection Act, chapter 392 of the Finance Code, reaches nearly anyone collecting a consumer debt, the original creditor included. The federal Fair Debt Collection Practices Act mostly reaches third parties collecting someone else's debt.

Which statute covers your collector

Section 392.001(6) defines a debt collector as, among other things, a person who directly or indirectly engages in debt collection, and debt collection means collecting, or soliciting for collection, consumer debts due or alleged to be due a creditor. No third-party requirement appears anywhere in that definition, so a lender dunning its own borrowers is a debt collector under Texas law. The chapter covers consumer debt only: obligations, actual or alleged, primarily for personal, family, or household purposes.

Texas then singles out a subset, the third-party debt collector, defined in section 392.001(7) by reference to the federal definition. That definition carves out an attorney collecting a debt as an attorney on behalf of and in the name of a client, unless the attorney has nonattorney employees who are regularly engaged to solicit debts for collection or who regularly contact debtors to collect or adjust debts. The subset carries extra duties: under section 392.101, a third-party debt collector or credit bureau may not collect in Texas without a $10,000 surety bond filed with the secretary of state.

The federal act is the narrow one. Under 15 U.S.C. 1692a(6), an FDCPA debt collector is a person in a business whose principal purpose is collecting debts, or who regularly collects debts owed or due or asserted to be owed or due another. A creditor collecting its own accounts in its own name generally falls outside that definition, unless it collects under a different name that suggests an outside firm is doing the work.

What chapter 392 forbids

Four sections of subchapter D ban collection methods by category. The examples below are a sample from each list, not the whole of it.

Threats and coercion

Section 392.301(a) bars threats and coercion, among them threatening violence, falsely accusing a debtor of fraud or another crime, and threatening arrest, or the seizure, repossession, or sale of property, without proper court proceedings.

Harassment and abuse

Section 392.302 bars oppression, harassment, and abuse. Its list includes profane or obscene language and causing a telephone to ring repeatedly or continuously, or making repeated or continuous calls, with the intent to harass.

Unfair or unconscionable means

Section 392.303 bars unfair or unconscionable means. Among its entries is 392.303(a)(2): a collector may not collect, or try to collect, interest or any incidental charge, fee, or expense unless the agreement creating the obligation expressly authorizes it or the law makes it chargeable to the consumer.

Fraudulent or misleading representations

Section 392.304(a) bars fraudulent, deceptive, or misleading representations. Among its entries: misrepresenting the character, extent, or amount of a consumer debt or its status in a judicial or governmental proceeding, using documents that simulate court or government authorization, and sending communications that purport to be from an attorney when they are not.

The federal overlay: validation and contact rules

The FDCPA runs parallel prohibitions on harassment (1692d), false or misleading representations (1692e), and unfair practices (1692f). Under 15 U.S.C. 1692g(a), within five days after the initial communication, the collector must send a written validation notice stating the amount of the debt, the creditor's name, and the consumer's dispute rights, unless that information was in the initial communication or the debt has been paid.

If the consumer does not dispute the debt within 30 days after receiving the notice, the collector may assume the debt is valid. If the consumer disputes in writing within that window, or requests in writing the original creditor's name and address, the collector must cease collection of the debt, or the disputed portion, until it mails the verification, a copy of a judgment, or the requested name and address. Collection activity that does not otherwise violate the act may continue during the 30 days unless a written dispute or written original-creditor request has arrived, but it may not overshadow, or be inconsistent with, the disclosure of the dispute rights. Silence carries no penalty: 1692g(c) forbids reading a failure to dispute as an admission of liability.

Section 1692c sets the contact rules. The rules in 1692c(a) all give way to the consumer's prior consent given directly to the collector or the express permission of a court. Absent knowledge to the contrary, a collector must assume the convenient time to contact a consumer is after 8 a.m. and before 9 p.m., local time where the consumer is. Contact is off limits once the collector knows an attorney represents the consumer on the debt and knows, or can readily ascertain, the attorney's name and address, unless the attorney fails to respond in a reasonable time or consents to direct contact. The workplace is off limits once the collector knows or has reason to know the employer prohibits such communication. Outside a short list of exceptions, the collector may not discuss the debt with third parties at all. And 1692c(c) hands the consumer a switch: a written notice refusing to pay, or asking that communication stop, ends further contact except to advise that efforts are terminated or to give notice of specified remedies.

How disputes work in practice

The federal route is the 1692g dispute above, sent in writing inside the 30-day window. Texas adds a route with no 30-day limit. Under section 392.202, an individual who disputes the accuracy of an item in a third-party debt collector's file may notify the collector in writing. The collector must record the dispute, and collection efforts stop while it is investigated. Only a determination that the item was accurate lets collection resume. One letter can invoke both statutes at once.

Old debts and debt buyers

Under section 392.307(c), a debt buyer may not sue a consumer, or start arbitration against one, after the limitations period set by section 16.004 of the Civil Practice and Remedies Code or section 3.118 of the Business and Commerce Code has expired. Section 392.307(d) closes the revival trap: once the action is barred, no payment, reaffirmation, or other activity on the debt revives it. A debt buyer still collecting a time-barred debt must open its first written communication with a conspicuous notice, in language section 392.307(e) prescribes, that it will not sue on the debt.

What a violation costs the collector

Chapter 392 carries its own enforcement. Under section 392.403, a person may sue for injunctive relief to stop a violation and for actual damages caused by one, and a person who wins is entitled to reasonable attorney's fees and costs. Section 392.402 separately makes a violation of the chapter, other than 392.307, a misdemeanor punishable by a fine of $100 to $500 per violation, and section 392.404 declares every violation a deceptive trade practice actionable under the Texas DTPA. Collectors keep one defense: under section 392.401 there is no violation where the act resulted from a bona fide error despite reasonable procedures adopted to avoid it.

None of this stops a lawful collection suit, and many end up before a justice of the peace. What happens after a citation arrives is the subject of the guide to small claims court in Texas. Every section named on this page links to the official text, the citation standard for the debt and small claims guides and for every page of the full guide library.