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Connecticut has some of the strictest debt collection laws in the U.S., offering protections beyond federal standards. Key laws include the Creditors' Collection Practices Act (CCPA) and Consumer Collection Agency statutes, enforced by the Connecticut Department of Banking. These laws apply to original creditors, third-party collectors, and debt buyers, ensuring fair practices and consumer rights.
Here’s what you need to know:
Violations can result in statutory damages of up to $1,000 for individuals and $500,000 for class actions, along with attorney fees. Consumers can file complaints with the Department of Banking or take legal action within one year of a violation.
Understanding these laws helps both consumers and collectors navigate Connecticut's debt collection landscape effectively.
Debt collection in Connecticut is governed by a mix of federal and state laws. At the state level, two key statutes come into play: the Creditors' Collection Practices Act (CCPA), outlined in General Statutes §§36a-645 to 36a-648, and the Consumer Collection Agency statutes, found in §§36a-800 to 36a-814. These laws, alongside the federal Fair Debt Collection Practices Act (FDCPA), establish strict rules for debt collection practices.
Under the CCPA, the term "creditors" refers to those who are owed a debt in the course of their business or those assigned such debts. This means that original creditors must adhere to the same restrictions that apply to third-party collectors, even though the FDCPA primarily focuses on third-party debt collectors.
The scope of these laws includes debts incurred for personal, family, or household purposes, such as credit card balances, personal loans, mortgages, and medical bills. Connecticut goes a step further by explicitly including child support and municipal property taxes under its protections. However, debts tied to business or commercial purposes are excluded from these consumer protections.
"The federal law does not preempt state law unless the two laws are inconsistent. States can apply for exemptions from the federal law, but Connecticut has not done so."
– Helga Niesz, Principal Analyst, Office of Legislative Research
Furthermore, Connecticut's Consumer Collection Agency law mandates that all third-party collectors be licensed and bonded through the State Banking Commissioner. Let’s take a closer look at how these laws work, starting with the CCPA.
The CCPA prohibits creditors and collection agencies from using tactics that are abusive, deceptive, or misleading when collecting debts. This protection applies equally to original creditors and third-party collection agencies.
Interestingly, Connecticut includes "debt buyers" under the definition of consumer collection agencies. So, if you purchase delinquent or defaulted debt for your own collection efforts, you must comply with all agency-related regulations, including obtaining a license. Additionally, the state caps collection fees at 15% of the amount collected, but only if the original contract permits such fees.
The penalties for violating the CCPA are serious. Consumers can sue within one year of a violation and may recover actual damages along with court-awarded damages of up to $1,000. In class action cases, damages can reach the lesser of $500,000 or 1% of the collector's net worth. However, creditors may avoid liability if they prove that the violation was an unintentional error despite having proper safeguards in place.
The federal FDCPA serves as a baseline for debt collection laws, and Connecticut builds on this foundation. While the FDCPA mainly regulates third-party debt collectors, Connecticut’s CCPA extends similar restrictions to original creditors, offering broader protections for consumers.
Connecticut also adds unique requirements, such as mandatory licensing for collection agencies and a $5,000 bond that agencies must file with the State Banking Commissioner. These rules also govern how agencies interact with their creditor clients.
Consumers benefit from having both state and federal protections. If violations occur, they can file complaints with the Connecticut Department of Banking or the federal Consumer Financial Protection Bureau (CFPB). Between February 2022 and late 2025, approximately 95,927 debt collection lawsuits were filed in Connecticut, with 70.5% resulting in default judgments.
In Connecticut, third-party debt collectors and debt buyers operating as consumer collection agencies must obtain a state license. This mandate applies to agencies located within the state as well as out-of-state collectors pursuing debts from Connecticut residents.
Every operational location must be listed in the application, and licenses cannot be transferred. If there’s a change in majority ownership or voting rights, the Banking Commissioner must be notified at least 30 days before the change. Failing to do so may lead to an automatic suspension of the license. Below, we’ll break down the steps and requirements to comply with Connecticut’s licensing rules.
Applications and renewals are handled through the Nationwide Multistate Licensing System (NMLS). Applicants must submit the following forms: Form MU1 for the entity, Form MU2 for control persons, and Form MU3 for each branch office. The initial license fee is $500, and the annual renewal fee is $400, with renewals due between November 1 and December 31.
Financial requirements differ based on the type of business. Traditional third-party collectors must maintain a tangible net worth of at least $50,000, while debt buyers only need to demonstrate a net worth above zero. All applicants must also provide a CPA-prepared financial statement and secure a surety bond of at least $25,000.
The Department of Banking performs detailed background checks on control persons, qualified individuals, and branch managers. These checks include state and national criminal history reviews and FBI fingerprint submissions. Once licensed, agencies are required to display their NMLS unique identifier on all advertisements, solicitations, business cards, and websites.
To meet the licensing requirements, start by creating an account on the NMLS website. Review Connecticut General Statutes §§36a-800 to 36a-814, along with the jurisdiction-specific requirements listed on the NMLS.
Your application should include CPA-prepared financial statements, proof of your surety bond, and details about your business structure and ownership. The Department of Banking will also conduct background investigations on key personnel, examining their financial condition and credit reports. The process typically takes several weeks. There’s a $100 investigation fee for initial applications, and licenses approved on or after November 1 remain valid until December 31 of the following year.
Consumers and creditors can verify an agency’s licensing status using the free NMLS Consumer Access website.
Connecticut enforces strict licensing rules to ensure compliance and protect consumer rights. Operating as a debt collector without a valid license can lead to serious repercussions.
Consumers can sue for actual damages, plus court-awarded damages of up to $1,000. In class actions, damages may reach the lesser of $500,000 or 1% of the collector’s net worth. Such lawsuits must be filed within one year of the violation. Additionally, the Banking Commissioner can issue cease and desist orders and work with the Attorney General to take legal action. Agencies that fail to renew their licenses on time or meet other ongoing requirements may face a $100 late filing fee and automatic license suspension.
| Violation Type | Criminal Fine | Potential Imprisonment |
|---|---|---|
| Operating without a license | Up to $1,000 | Up to 1 year |
| Other statutory violations | Up to $500 | Up to 6 months |
Certain entities are exempt from these licensing requirements. Exemptions include Connecticut Bar members, banks and out-of-state banks, public officers acting under court orders, loan servicers handling both current and delinquent accounts, and employees of licensed agencies or exempt creditors.
Connecticut law, along with federal regulations, ensures that consumers are safeguarded by enforcing clear rules on how debt collectors can operate.
Debt collectors are required to send you a written validation notice within five days of their initial contact. This notice must include:
If you dispute the debt in writing within that 30-day period, the collector must pause all collection efforts until they provide proper verification of the debt. Additionally, you can request the name and address of the original creditor within the same timeframe, and they must supply this information.
You also have the right to stop all communication from a collection agency by sending them a written request. These rules set the foundation for how and when collectors are allowed to contact you.
Debt collectors must follow specific guidelines when reaching out to you. For example, they can only contact you between 8:00 a.m. and 9:00 p.m. local time, unless you agree to another schedule. If you have an attorney handling the debt, collectors must direct all communication to your attorney unless they fail to respond in a reasonable amount of time.
Collectors can contact your workplace unless they know - or have reason to believe - that your employer prohibits personal calls during work hours. If this is the case, you can notify the collector, and they must stop calling your workplace.
When it comes to contacting third parties (like your neighbors or coworkers), collectors are limited to asking for "location information", such as your address, phone number, or workplace. They cannot mention your debt and, in most cases, are only allowed to contact a third party once.
Another important rule: If you owe multiple debts to the same collector, any payment you make must be applied to the debt you specify. Collectors cannot allocate your payment to a disputed debt.
| Consumer Right | What It Means for You |
|---|---|
| Initial Notice | Collectors must send a written notice within five days of first contact, detailing the debt amount and creditor's name. |
| Dispute Window | You have 30 days to dispute the debt in writing after receiving the notice. |
| Contact Hours | Collectors can only contact you between 8:00 a.m. and 9:00 p.m., unless you agree to a different time. |
| Cease Contact | You can send a written notice to stop all communications, except for legal notices. |
| Attorney Rule | Once collectors know you have legal representation, they must communicate only with your attorney. |
If a collector violates these rights, they can face serious consequences. Consumers have the option to sue for actual damages, plus additional court-awarded damages of up to $1,000. You have one year from the date of the violation to file your lawsuit. In class action cases, collectors may be liable for up to $500,000 or 1% of their net worth, whichever amount is smaller.
Connecticut law sets clear boundaries for debt collectors, ensuring they adhere to strict standards of conduct. These rules, which align with federal regulations, are designed to shield consumers from abusive, misleading, or harassing behavior. Knowing these prohibited practices can help you identify when a debt collector steps out of line. Below, we explore two key areas where collectors are restricted: harassment tactics and deceptive practices.
Debt collectors are strictly forbidden from using threats of violence or obscene language to intimidate or harass you. Persistent calls aimed solely at annoying or pressuring you are also illegal. Additionally, collectors must reveal their identity during calls and cannot manipulate caller ID to mislead you.
False threats are another serious violation. For instance, a collector cannot claim that failure to pay will lead to your arrest, imprisonment, or property seizure unless such actions are both lawful and genuinely intended by the creditor. Similarly, threatening lawsuits or legal actions they have no authority or intention to pursue is prohibited.
Debt collectors are also barred from engaging in deceptive or fraudulent behavior. Connecticut General Statutes § 36a-646 explicitly prohibits them from using false, misleading, or deceptive statements in their efforts to collect debts. This includes pretending to be attorneys, government officials, or representatives of federal or state agencies. Using fake titles, badges, or uniforms to create a false impression is likewise illegal.
"Consumer collection agencies may not use any false, deceptive or misleading statements when collecting a debt." - Connecticut Department of Banking
Collectors must provide accurate information about the nature, amount, and legal status of your debt. They cannot falsely claim that your debt has been sold to "innocent purchasers for value" or send documents that mimic official court or government records.
When it comes to post-dated checks, collectors face additional restrictions. They are not allowed to deposit a check before the date written on it. If a check is dated more than five days in advance, they must notify you in writing of their intent to deposit it, giving at least three days' notice but no more than ten. Furthermore, all communications must clearly state that they are attempts to collect a debt, and any information obtained can only be used for that purpose.
Connecticut Statute of Limitations for Different Debt Types
The statute of limitations sets a deadline for how long creditors or debt collectors can legally sue you over unpaid debts. Once this period expires, the debt becomes legally uncollectible through the courts, though it might still show up on your credit report. Collectors can continue contacting you, but they cannot threaten legal action if the statute has run out. Below, we’ll break down the time limits for different types of debts and how you can protect yourself against outdated collection attempts.
In Connecticut, the statute of limitations varies depending on the type of debt. For written contracts, including personal loans, promissory notes, and most credit card agreements, the limit is six years under C.G.S. § 52-576. Medical bills, often treated as simple or implied contracts, also fall into this six-year category. As Matthew Ranelli, Research Attorney at the Office of Legislative Research, explains:
"Medical bills generally are simple or implied contracts and thus the SOL is six years."
Oral contracts, or verbal agreements with no written documentation, have a shorter three-year limit under C.G.S. § 52-581. Contracts for the sale of goods come with a four-year limit. If a court judgment is involved, creditors have up to 20 years to enforce it, with the option to renew before it expires.
| Debt Type | Statute of Limitations | Connecticut Statute |
|---|---|---|
| Written Contracts / Personal Loans | 6 Years | C.G.S. § 52-576 |
| Credit Card Debt | 6 Years | C.G.S. § 52-576 |
| Medical Debt | 6 Years | C.G.S. § 52-576 |
| Oral Contracts | 3 Years | C.G.S. § 52-581 |
| Sale of Goods | 4 Years | C.G.S. § 42a-2-725 |
| Court Judgments | 20 Years | C.G.S. § 52-598 |
The statute of limitations typically starts from the date of your last payment or when the account first became delinquent. For purchased debt, Connecticut law (C.G.S. § 36a-814) ensures that debt buyers cannot restart the clock through partial payments or acknowledgments. The statute clearly states:
"When the applicable statute of limitations on a cause of action to collect debt owed by a consumer has expired, any subsequent payment toward or oral or written affirmation of the debt... shall not extend the limitations period within which the creditor or consumer collection agency that purchased the debt may bring the cause of action."
This provision protects consumers by preventing debt buyers from manipulating the timeline through small payments or acknowledgments.
If a debt collector sues you for a debt that’s past the statute of limitations, you must actively raise this defense in court. The court won’t automatically dismiss the case - you need to show up and assert the statute of limitations as your defense. Ignoring the lawsuit could lead to a default judgment against you, even if the debt is too old to collect legally. Connecticut law explicitly prohibits lawsuits on time-barred debts, particularly for purchased debt.
Before making any payment on an old debt, confirm the date of your last payment or activity on the account. Making even a small payment or acknowledging the debt could complicate matters if the statute of limitations hasn’t expired. Keep in mind that certain actions, like moving out of Connecticut during the collection period, could pause (or “toll”) the statute of limitations, potentially extending the deadline.
Collectors who threaten legal action on expired debts are violating both federal and state laws. If this happens, report the violation to the Connecticut Department of Banking or the Attorney General’s office. You may also have the right to sue for damages. Under Connecticut law, consumers can recover actual damages, up to $1,000 in additional damages, and attorney’s fees for deceptive collection practices.
State enforcement mechanisms and legal remedies offer ways to address violations tied to licensing rules and consumer protections. Here's a breakdown of the options available to consumers and the role of state agencies in enforcement.
If you've experienced a violation, you have one year to file a lawsuit in either state or federal court. Acting quickly is crucial. Courts can grant actual damages to cover financial losses caused by the violation, along with statutory damages of up to $1,000. Additionally, if you win your case, you may recover court costs and reasonable attorney's fees.
For violations that affect a large group of consumers, class-action lawsuits are an option. In these cases, the total recovery is capped at the lesser of $500,000 or 1% of the debt collector's net worth. Before pursuing legal action, you should file a complaint with the Connecticut Department of Banking (DOB). You can do this by completing their Online Customer Assistance Form, emailing banking.complaints@ct.gov, or calling 860-240-8170. If the collection agency has annual receipts exceeding $10 million, report the violation to the Consumer Financial Protection Bureau (CFPB) as well.
It's worth noting that debt collectors can avoid liability if they can prove the violation was an unintentional error and that they have systems in place to prevent such mistakes. To strengthen your case, document every interaction - record dates, times, and the details of all communications.
State agencies play a critical role in monitoring and enforcing these rules. The Connecticut Department of Banking (DOB) oversees debt collection activities within the state. Their Consumer Credit Division handles consumer complaints, conducts routine inspections, and monitors both licensed and unlicensed collection agencies operating in Connecticut. To enforce compliance, the DOB has tools such as issuing cease and desist orders, imposing fines, and suspending or revoking licenses.
The DOB often resolves violations through voluntary compliance. As the agency states:
"If a division believes a violation of law has occurred, it may attempt to obtain voluntary compliance by entering into a consent order, settlement agreement or stipulation and agreement with an individual or entity regulated by the department".
In cases requiring further action, the DOB can escalate civil matters to the Attorney General's Office or criminal violations to the Chief State's Attorney's Office for prosecution.
| Remedy/Penalty Type | Maximum Amount/Penalty | Limit |
|---|---|---|
| Individual Statutory Damages | $1,000 | 1 Year |
| Class Action Damages | Lesser of $500,000 or 1% of net worth | 1 Year |
| Fine for Unlicensed Activity | $1,000 | N/A |
| Imprisonment for Unlicensed Activity | 1 year | N/A |
| Fine for General Violations | $500 | N/A |
| Imprisonment for General Violations | 6 months | N/A |
Connecticut's debt collection laws have evolved, introducing protections for domestic violence victims and hinting at federal reforms that could reshape the landscape further. Staying informed about these changes is critical for both collectors and consumers to navigate compliance and avoid potential penalties. Let’s break down the key updates and their implications.
Starting January 1, 2025, Public Act 24-77 offers new safeguards for domestic violence victims who were coerced into taking on unsecured credit card debt.
Under this law, when a victim files a "Notice of Coerced Debt Review", collectors must immediately pause all collection activities for at least 60 days. During this window, creditors are required to examine evidence such as police reports or restraining orders to assess whether the debt was incurred under duress. Attorney Vincent J. Averaimo highlights the importance of this process:
"For those creditors collecting on unsecured credit card debt, or any debt within the meaning of this statute, it is imperative that you have an established procedure to undertake and document proper review and investigation of the file to determine whether the debt at issue is a coerced debt under the statute".
Interestingly, within the first two months of implementation, there were reports of self-represented parties filing notices in foreclosure cases, even though the law primarily targets unsecured debts. If such a notice is filed for secured debts, like mortgages, collectors are advised to file a Motion to Strike to avoid unnecessary delays. If a debt is confirmed as coerced, all collection efforts must cease, and creditors are required to notify credit reporting agencies to remove any related negative information.
Federal reforms could bring sweeping changes to debt collection practices starting in 2026. The Fair Debt Collection Improvement Act (H.R. 2704), currently under consideration in the 119th Congress, proposes a new section 811A of the FDCPA. This section would prohibit any attempts to collect consumer debt after the statute of limitations has expired. While current regulations advise against such practices, this change would make the prohibition legally binding.
Other notable updates include:
Furthermore, the federal government plans to step up administrative wage garnishments for defaulted federal student loans in 2026. This change allows for the seizure of up to 15% of disposable income without a court judgment, provided the required notices are issued.
Finally, Connecticut has adopted the 2022 UCC amendments, effective January 1, 2026. These updates address rules for digital assets, virtual currencies, and AI. Debt collection agencies will need to adjust their policies for handling "Controllable Electronic Records" to stay compliant with these provisions.
These changes underscore the importance of staying proactive and updating collection practices to align with the evolving legal framework. Both collectors and consumers will need to adapt to ensure compliance and protection.
Following Connecticut's debt collection laws isn't just a recommendation - it's a requirement. Violating the Connecticut Creditors' Collection Practices Act can lead to serious consequences, including actual damages, statutory damages of up to $1,000, and coverage of reasonable attorney's fees. For those collecting debts without proper licensing, the penalties are even steeper: fines up to $1,000 and potential imprisonment for up to one year.
As outlined earlier, the legal environment surrounding debt collection is constantly changing. The upcoming 2025 Coerced Debt requirements under Public Act 24-77 and potential federal updates in 2026 highlight how quickly things can shift. Staying ahead of these changes is crucial for both collectors and consumers. For collectors, this means securing proper licensing through the Nationwide Multistate Licensing System (NMLS), implementing strong compliance measures, and maintaining accurate records to meet the Banking Commissioner’s standards.
For consumers, understanding your rights is key. Recognizing when a collector crosses the line - and knowing how to respond - empowers you to take action. The law offers clear protections against harassment, false statements, and other unfair practices, with remedies that include actual and statutory damages.
Ultimately, ethical practices create a win-win situation. Collectors who stay licensed, respect communication rules (typically 8 a.m. to 9 p.m.), and provide required validation notices not only avoid legal trouble but also treat consumers with fairness and respect. It's worth noting that the "bona fide error" defense only applies to those who have documented procedures in place - not those who make mistakes out of ignorance.
When debt collection practices are fair, transparent, and within the bounds of the law, everyone benefits. Whether you're a collector, buyer, or consumer, staying informed about Connecticut's debt collection laws ensures accountability and builds trust across the board.
To check if a collector is properly licensed in Connecticut, visit the Connecticut Department of Banking. They offer tools to search for licensed consumer collection agencies, individuals, or entities. You can either use their online database or reach out to them directly to ensure the collector complies with Connecticut's licensing laws and regulations.
If you’re facing a lawsuit for an old debt in Connecticut, it’s important to act quickly to safeguard your rights. Start by thoroughly reviewing the summons and complaint to understand the claims against you. Use the court-provided answer form to respond, and make sure to file it with the court before the deadline. Don’t forget to send a copy of your response to the plaintiff.
Make it a priority to attend all court hearings or mediation sessions as scheduled. If you’re unsure about the process or need guidance, take advantage of available legal resources, such as self-help guides or legal aid services, to help you navigate the situation.
If you're trying to demonstrate that a debt was coerced under the 2025 law, you'll need to provide evidence that it was the result of duress, intimidation, threats, or undue influence. To strengthen your case, gather and present clear documentation or proof during the review process.
This could include:
Having solid, well-organized evidence is key to supporting your claim effectively.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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