How to deal with Debt CollectorsIf you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your "creditors", or an error is made on your accounts, you may be contacted by a "debt collector."
You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.
This article answers commonly asked questions about your rights under the Fair Debt Collection Practices Act.
What debts are covered? Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts. Who is a debt collector?
A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis. A "collector" is not the same person as the "collections department at the original creditor", although, they must follow all of the below mentioned rules in this article. If you are still working with the original creditor/original creditors collections department you have not made it to the private collector. If you are not sure who you are talking to, ask. They must correctly identify who they are and if they are collecting the debt because they are the creditor you owe or because they now own debt and are collecting the debt for themselves. One of the best tricks a collector has is to not clearly explain that they bought the debt for cheap and are in the business of trying to collect on it. They may avoid at all cost making a clear statement that they are not in fact the same company as the creditor and they are not collecting it on behalf of the creditor. What are the three types of collectors? The creditor has a collections department that will try to collect the amount you owe them. The 3rd party collector may be working for the creditor as their collections department because the creditor does not have a collections department of their own. The private collector has no affiliation to the original creditor and bought your debt at a discounted rate.
How do I really know who I am talking to?
It is really simple... if you make the payment out to the original creditor you are negotiating with the original creditor or a company they use for collections. If you make the payment out to someone other than the original creditor you are negotiating with a private collector. Now there may be a few exceptions to the abovementioned rule but in most cases the private collector will not want you to send a payment to original creditor. The private collector is in the business of buying your debts at a discount and then trying to collect the most they can for it. Can I tell by looking at my credit report? Another way of knowing where you debt is at is by looking at your credit report. On your credit report there will be trade line (the term for credit entry) for the original creditor showing the debt owed. On it there will the date when it opened, the type of debt (installment, revolving credit line, etc), when it went late, the amount owed, etc. If the trade line indicates the numerical symbol or verbiage that it was "charged-off" then the original creditor has given up trying to get their money from you. The words "charge-off" is an accounting term that means it was removed from the company books as debt owed. The private debt collector will show up on your credit report as a separate trade line from the original creditors trade line. It will start on the date they obtained your debt and it will only show up as being a collection account. The original creditor and private collector cannot report you late every month together. Only one can try to collect and report you as late at any one time. Contact the CRA’s (see below) to correct this if it happens. 
How may a debt collector contact you?
A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.
Can you stop a debt collector from contacting you?
You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor.
May a debt collector contact anyone else about your debt?
If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.
What must the debt collector tell you about the debt?
Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.
May a debt collector continue to contact you if you believe you do not owe money?
A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
What types of debt collection practices are prohibited?
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact.
For example, debt collectors may not: · use threats of violence or harm; · publish a list of consumers who refuse to pay their debts (except to a credit bureau); · use obscene or profane language; or · repeatedly use the telephone to annoy someone.
False statements. Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not:
· falsely imply that they are attorneys or government representatives; · falsely imply that you have committed a crime; · falsely represent that they operate or work for a credit bureau; · misrepresent the amount of your debt; · indicate that papers being sent to you are legal forms when they are not; or · indicate that papers being sent to you are not legal forms when they are.
Debt collectors also may not state that:
· you will be arrested if you do not pay your debt; · they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so; or · actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.
Debt collectors may not:
· give false credit information about you to anyone, including a credit bureau; · send you anything that looks like an official document from a court or government agency when it is not; or · use a false name.
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not:
· collect any amount greater than your debt, unless your state law permits such a charge; · deposit a post-dated check prematurely; · use deception to make you accept collect calls or pay for telegrams; · take or threaten to take your property unless this can be done legally; or · contact you by postcard.
What control do you have over payment of debts?
If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.
What can you do if you believe a debt collector violated the law?
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.
Where can you report a debt collector for an alleged violation?
Report any problems you have with a debt collector to your state Attorney General's office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General's office can help you determine your rights. |
