Rules of Debt Collection – Don’t Let ‘Em Walk All Over You!
Published On: November 19, 2009
In this tough economy, more and more people are finding themselves with debt problems. And things gets worse when debt collectors get aggressive. Everyone should know their rights – what is considered “fair debt collection” as defined by the Federal Fair Debt Collection Practices Act, or FDCPA.
FDCPA prohibits debt collectors from being abusive. Note that FDCPA regulates debt collectors who work for collection agencies and does not cover debt collectors who work for the original creditor (the company that originally lent you the money).
We’d like to think that most bill collectors act professionally and follow the law when contacting you. However there are some overeager ones who go too far.
Here’s What Debt Collectors CANNOT DO
1. CAN’T call you repeatedly or at an unreasonable time (before 8 a.m. or after 9 p.m.)
2. CAN’T use obscenity, profanity or threaten violence.
3. CAN’T call you without identifying themselves as bill collectors.
4. CAN’T call you at work if your employer doesn’t allow it.
5. CAN’T claim to be an attorney if they are not!
6. CAN’T claim you owe more money than you actually do.
7. CAN’T tell you that you’ll go to jail or that your property will be seized. Remember, there is no such thing as Debtor’s Prison.
8. CAN’T add unauthorized interest, fees or charges.
9. CAN’T call third parties EXCEPT your attorney, a credit bureau or the original creditor to find your whereabouts. And unless you have asked the debt collector in writing to stop contacting you (more on this below), they can also contact your spouse, your parents (if you are a minor) and co-debtors.
If a Debt Collector Violates the FDCPA Rules, Here’s What YOU CAN DO
1. Demand they Stop: under FDCPA rules, you can write to the collection agency to tell them to stop all communications with you. After that, they cannot contact you for any reasons except to tell you that collection efforts have ended or that they intend to sue you.
2. Document their Violations: start a log; write down what happened, when and who witnessed it. It’s not a bad idea to have another person present or on the phone during future communications with the collector. Thinking about recording the phone conversations? – be careful as it is illegal in some states, such as California, to record phone conversations without the knowledge of the other person.
3. File a Complaint with the Federal Trade Commission: the FTC oversees collections agencies. https://www.ftccomplaintassistant.gov/. Include the collection agency’s name, address, name of the collector, dates and times of conversations, names of any witnesses, include copies of all offending letters you receive, and a copy of any offending voicemails or messages.
Send the complaint to state agencies. Send a copy of your complaint to the state agency that regulates collection agencies for the state where the agency is located. To find the agency, call information in that state’s capital city or check the state’s website.
Send the complaint to the creditor and collection agency. Finally, send a copy of the FTC complaint to the original creditor and the collection agency. The original creditor may be concerned about its own liability and offer to cancel the debt.
4. SUE THE DEBT COLLECTOR: If there are repeated violations and you can document them, then suing may be a good idea. But if the violations were merely annoying, don’t waste your time. For example, if the collector called you three times in one day, but never again, you don’t have a case.
You can sue in Small Claims Court or hire a lawyer. If you win, the other side may be required to pay your attorney’s fees and/or court costs.