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Pennsylvania debt collection laws offer strong protections for consumers while holding debt collectors and creditors accountable for fair practices. Key highlights include:
These laws ensure transparency and protect consumers from unfair practices while setting clear boundaries for debt collectors.
The Fair Debt Collection Practices Act (FDCPA) lays out clear rules for third-party debt collectors, ensuring they operate within strict boundaries. For example, they are prohibited from calling you before 8 a.m. or after 9 p.m. local time. If they know your employer doesn’t allow personal calls at work, they must stop contacting you there.
Collectors can only reach out to third parties - like your neighbors or family members - to ask for your location. They are strictly forbidden from disclosing that you owe a debt. Whitney Hughes, Director of the Allegheny County Bar Association Lawyer Referral Service, emphasizes the importance of these protections:
"The Fair Debt Collection Practices Act (often called the 'FDCPA') gives you specific legal rights to sue debt collectors who unlawfully threaten, berate, intimidate or harass you".
Collectors are also required to send you a written validation notice within five days of their initial contact. This notice must include key details like the amount owed, the creditor’s name, and your right to dispute the debt within 30 days. Additionally, during every call, they must provide a Mini-Miranda Warning, explaining their role and the fact that any information you share will be used for debt collection purposes.
The FDCPA strictly bans abusive behavior, such as threats of violence, obscene language, publishing "deadbeat" lists, or pretending to be attorneys or government officials. As the Pennsylvania Office of Attorney General highlights:
"Debt collectors and creditors may not use any false or misleading statements when collecting a debt".
Building on these protections, Regulation F introduces modern guidelines to address evolving communication practices in the digital age.
On November 30, 2021, Regulation F introduced new rules to further limit harassment by debt collectors. One key provision is the "7-in-7" rule, which presumes harassment if a collector calls more than seven times within seven consecutive days about a specific debt. Once you’ve had a successful conversation with a collector about a debt, they must wait at least seven days before contacting you again about the same issue.
Regulation F also brings clarity to modern communication methods. Collectors are permitted to use email and text messages without needing prior consent, as long as they provide a clear way for you to opt out. They are also required to honor any restrictions you request on call times or methods of contact.
Another important update is the requirement for collectors to contact you or send a validation notice before reporting a debt to credit bureaus. This step helps prevent unexpected negative marks on your credit report. Moreover, Regulation F mandates improved validation notices with detailed information, making it easier for you to identify and dispute any inaccuracies.
These updates strengthen consumer protections, complementing Pennsylvania’s already rigorous debt collection standards.
Pennsylvania's FCEUA takes federal protections a step further by extending similar rules to original creditors and introducing additional safeguards for consumers.
While the FDCPA focuses solely on third-party debt collectors, the FCEUA applies to both original creditors and third-party collectors. Enforced since June 26, 2000, this Act broadens consumer protections:
"The FDCPA only governs the behavior of third-party debt collectors... On the other hand, the Fair Credit Extension Uniformity Act applies to creditors and third-party debt collectors."
The FCEUA enforces strict communication rules. Collectors cannot contact consumers before 8 a.m. or after 9 p.m.. They are limited to one phone conversation per week about a specific debt, and more than seven calls within seven days is considered harassment. Additionally, contacting debtors via publicly visible social media is strictly prohibited.
The Act also bans deceptive practices, such as misrepresenting debt details or implying a connection to the government. Collectors cannot use visual aids that falsely suggest a debt obligation.
The FCEUA provides strong protections against abusive behavior. Collectors are forbidden from threatening violence, using obscene language, or making repeated calls intended to annoy. Threats of arrest, imprisonment, or property seizure are also banned unless legally valid and genuinely intended.
Once a consumer is represented by an attorney, collectors must direct all communication to the lawyer after receiving their contact details and a timely response. When reaching out to third parties to locate a debtor, collectors cannot reveal that a debt is owed and are generally limited to contacting the same individual only once.
These rules aim to curb harassment and ensure fair treatment, with violations leading to serious repercussions.
Breaking the FCEUA comes with heavy penalties. Every violation also breaches Pennsylvania's Unfair Trade Practices and Consumer Protection Law, giving consumers the right to claim actual damages or a minimum of $100 per violation - whichever is greater:
"Violation of FCEUA is also a violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law... which offers you actual damages or $100 for each violation (whichever is higher)."
Courts may impose treble damages (three times the actual damages) and award reasonable attorney fees and court costs. Consumers have two years from the violation date to file a lawsuit. Violating an injunction can result in civil penalties of up to $5,000 per violation, payable to the Commonwealth. Additionally, using documents that mimic court proceedings is classified as a third-degree misdemeanor under Pennsylvania law.
These provisions underscore Pennsylvania's commitment to protecting its residents from unfair debt collection practices.
Pennsylvania Debt Collection Laws: Statute of Limitations by Debt Type
Pennsylvania has clear rules in place to protect consumers by limiting the time creditors have to take legal action on unpaid debts.
In Pennsylvania, most consumer debts - including credit cards, medical bills, personal loans, and written contracts - are subject to a four-year statute of limitations. This period typically starts after the first missed payment or the default date, which is often defined as the day following a contractual trigger, like two consecutive missed payments.
Certain debts, however, don’t follow the four-year rule. Federal student loans, state and federal taxes, and first mortgages have no statute of limitations. Promissory notes labeled "under seal" may extend up to 20 years, while second mortgages generally fall under the standard four-year limit.
| Debt Type | Statute of Limitations |
|---|---|
| Credit Card Debt | 4 Years |
| Medical Bills | 4 Years |
| Oral & Written Contracts | 4 Years |
| Promissory Notes | 4 Years (20 years if "under seal") |
| Second Mortgages | 4 Years |
| First Mortgages | No Limit |
| Federal Student Loans | No Limit |
| State & Federal Taxes | No Limit |
It’s important to note that actions such as making a partial payment, providing written acknowledgment of the debt, or agreeing to a new payment plan can restart the four-year statute of limitations clock.
These timeframes are essential for understanding what creditors can and cannot do once a debt becomes time-barred.
Once the statute of limitations expires, the debt is considered time-barred. This means creditors lose the legal right to sue for repayment. However, they can still attempt to collect the debt through non-legal means, such as phone calls, letters, or text messages. Importantly, they cannot threaten legal action for a time-barred debt.
"While a creditor cannot sue you if the statute of limitations has run, they can still call you and send you letters to try to collect on that debt." – David M. Offen, Bankruptcy Lawyer
If a creditor files a lawsuit over a time-barred debt, you must act quickly. Raise the statute of limitations as an affirmative defense to avoid a default judgment, which could result in wage garnishment or bank account levies. Additionally, request written validation of the debt within five days of any initial contact. This will help confirm the default date and determine whether the debt is time-barred. If collectors persist, you can send a cease-and-desist letter to stop further communication.
Keep in mind that even though a debt may be time-barred, it can still appear on your credit report. Typically, debts remain on your credit report for up to seven years from the date of the first missed payment.
Running a debt collection business in Pennsylvania comes with specific licensing and compliance rules. These requirements not only ensure adherence to consumer protection laws but also help agencies avoid penalties for non-compliance.
The Pennsylvania Department of Banking and Securities regulates licensing for debt collectors under the Debt Management Services Act. To legally operate, agencies must pass a background check and secure a $5,000 surety bond. Pennsylvania stands out by not requiring individual collector registration or a resident manager, making the process less complicated compared to many other states.
Annual license renewal is required. Agencies must renew their licenses by September 30th each year. The renewal process involves submitting updated applications, paying fees, and demonstrating compliance with both state and federal laws. Failure to meet the deadline results in license expiration and potential fines.
It’s important to note that these licensing requirements apply to both original creditors and third-party collectors in Pennsylvania.
After securing a license, maintaining thorough compliance records is critical. Proper documentation ensures agencies meet legal obligations and avoid regulatory penalties.
Key records to maintain include consumer communications, debt validation notices, payment histories, and assignment agreements. These records not only demonstrate compliance during audits but also simplify the annual renewal process.
Agencies must also send a written validation notice within five days of their first contact with a consumer. This notice must outline the debt amount, the name of the creditor, and the consumer’s rights to dispute the debt. If a consumer requests to stop communication via a specific method, such as phone calls or text messages, agencies are required to honor that request immediately.
"Cornerstone is always on the ball with watching all of our licensing and things like that need to be done, nothing falls through the cracks." – Lindsey C.
Additionally, collection agencies pursuing legal action on assigned claims must use an attorney for representation - they cannot provide legal services themselves. Simulating court documents or threatening legal action without intent to follow through is classified as a third-degree misdemeanor.
Debt portfolio trading in Pennsylvania requires strict compliance with both the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Extension Uniformity Act (FCEUA). Debexpert's platform offers tools to help buyers and sellers navigate these regulations while conducting transactions efficiently.
Pennsylvania’s FCEUA applies to both original creditors and third-party debt collectors, making it broader in scope than the federal FDCPA. Sellers must ensure their portfolios meet these standards before listing, while buyers should perform detailed due diligence.
One critical step is confirming that the original credit agreements include written assignment clauses and allow assignments under Pennsylvania law. According to state law, the assignment between the creditor and collection agency must be in writing, and the original debtor agreement must not prohibit such assignments. This aligns with the stringent requirements of the FCEUA, ensuring transactions remain lawful. Without proper documentation, transfers may violate 18 Pa. Cons. Stat. Ann. § 7311.
Additionally, review fee structures and portfolio data to ensure that any interest, late fees, or collection charges are clearly authorized in the original agreement. This step minimizes the risk of disputes or legal issues.
Another key compliance factor involves confirming whether any consumers are represented by attorneys. Pennsylvania law explicitly prohibits contacting consumers once it’s known they have legal representation. To avoid violations, portfolios should include fields that indicate attorney representation.
Debexpert’s platform integrates these compliance checks with advanced analytics, making risk evaluation more efficient.
Debexpert's analytics tools go beyond compliance checks, helping buyers assess both legal and financial risks. For instance, analytics can flag accounts where the last payment occurred more than four years ago. While collectors may still attempt to recover these time-barred debts, legal action to enforce them is prohibited, which can significantly impact the portfolio's value.
It’s also important to review communication histories within the portfolio for any violations of time or frequency restrictions, as these infractions can lead to heightened legal risks and penalties.
Debexpert’s secure file-sharing and analytics features allow buyers to verify whether validation notices were sent within five days of initial contact, as required by law. This documentation is crucial since Pennsylvania state law gives consumers two years to file lawsuits for violations, compared to the one-year window under the federal FDCPA. These tools help ensure thorough evaluation and reduce exposure to potential legal challenges.
Pennsylvania's debt collection rules have undergone significant updates with the introduction of the Consumer Debt Collection Fairness Act (HB 1731) on July 14, 2025. This legislation, inspired by New York's consumer protection model, introduces stricter procedural requirements that go beyond the existing Fair Credit Extension Uniformity Act.
Under HB 1731, debt collectors must now include extensive documentation when filing lawsuits. Each complaint must specify the original creditor's name, the last four digits of the account number, an itemized breakdown separating the charge-off balance from any post-charge-off interest and fees, and a copy of the original contract. If the debt has been sold or transferred, a documented chain of title is required to prove ownership.
The law also shortens the statute of limitations for debt collection lawsuits to three years, starting from the consumer's last payment or charge. This marks a shift from the previous four-year timeframe applied to most contracts. Additionally, courts cannot issue default judgments unless the plaintiff provides an affidavit of facts based on personal knowledge, includes all necessary documentation, and proves that the consumer was properly served with a "Notice of Consumer Rights". A 90-day transition period following the law's enactment allows the industry time to adjust to these changes.
These updates are reshaping how debt buyers and collectors operate in Pennsylvania, requiring them to align with stricter compliance standards.
For debt buyers and collectors, HB 1731 introduces new challenges in managing and evaluating portfolios. Buyers must now ensure portfolios include original contracts and complete title documentation. Minimal paperwork is no longer sufficient, and portfolios without these elements may have limited recovery potential.
The reduced three-year statute of limitations adds another layer of complexity, requiring collectors to closely monitor payment dates. This shorter window makes older accounts less viable for litigation. Complaint templates must also be updated to include detailed itemizations and the mandatory consumer rights notice to avoid case dismissals. These changes align with broader federal trends, such as Regulation F, which prioritizes transparency and aims to curb problematic practices like "robo-signing" that have led to unfair default judgments in the past.
Debt professionals operating in Pennsylvania must navigate a complex regulatory framework, balancing compliance with both the FDCPA and the FCEUA. Unlike federal regulations that primarily target third-party collection agencies, the FCEUA expands consumer protections to include original creditors and internal collection departments as well. This means that even in-house teams must follow the same strict guidelines as external collection agencies.
Non-compliance can lead to costly consequences. For example, under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL), consumers can pursue up to three times the actual damages, plus attorney fees. Additionally, the state provides a two-year window to file lawsuits for violations - double the one-year limit set by federal law. Debt professionals should also be mindful of the four-year statute of limitations on most consumer debts, which plays a critical role in portfolio management and evaluation.
To stay compliant, professionals should focus on meticulous documentation, such as verifying authorized fees and maintaining clear communication records. Pennsylvania also allows for a bona fide error defense, but only when there are well-documented and consistently applied error-avoidance protocols.
Given the stringent requirements, integrating technology into compliance workflows is no longer optional - it’s essential.
Modern technology offers debt professionals the tools needed to manage compliance efficiently while reducing risks.
Automated systems can handle key regulatory requirements, such as ensuring communication occurs only during Pennsylvania’s permitted hours (8 a.m. to 9 p.m.), monitoring the four-year debt statute of limitations, and identifying accounts where consumers have legal representation. These platforms also strengthen the bona fide error defense by providing structured, auditable processes.
For instance, Debexpert offers portfolio analytics that help debt buyers evaluate compliance risks before making acquisitions. The platform ensures that all required documentation - such as written assignments and original agreements - is both accessible and compliant before any trade takes place. This proactive approach not only minimizes legal exposure but also enhances operational efficiency.
Yes, Pennsylvania’s Fair Credit Extension Uniformity Act (FCEUA) applies to both original creditors and third-party debt collectors. This means it covers anyone involved in collecting debts, ensuring they adhere to rules against unfair or deceptive practices in their collection efforts.
In Pennsylvania, the clock on the statute of limitations for debt - set at four years - can reset if you make a partial payment or acknowledge the debt in any way. This means the timeframe for creditors to take legal action could start over. Be mindful when dealing with old debts, as even a small payment or certain communications might reopen the window for collection efforts.
If you're facing a lawsuit over a time-barred debt in Pennsylvania, you can use the statute of limitations as your defense. In Pennsylvania, the statute of limitations for debt is four years from the date of your first missed payment. To navigate this situation effectively, it's wise to consult an attorney who can provide proper legal guidance and representation.
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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