How Dealing With Debt Collectors Really Works : Chapter 3
The only third party with whom a collector can discuss your debt is your attorney (if you have one). Collectors may call your friends, family and coworkers, but only to obtain your address, phone number or place of employment.
You have the right to stop debt collectors from contacting you, but you must write a letter to the collector requesting that they do so. Once a collection agency receives your letter, they may not contact you again except to inform you that there will be no further contact or to alert you to any impending legal action the agency intends to take. The letters and phone calls may stop, but you’re still obligated to pay your debt, and you could still be sued by the agency or your original creditor.
Be aware that the above applies only to debt-collection agencies; creditors who handle their own in-house collections are not obligated to follow the requirements of the FDCPA. In other words, your local auto dealer has more leeway in employing intimidating tactics if you fall three months behind on your payments. Once the dealer turns your account over to a debt collector, however, that collector must adhere to FDCPA standards.
Now that you know your rights when it comes to debt collection, read the next page for some helpful hints about dealing with debt collectors.
* The best advice is simply to make every effort to pay your bills on time! But if it’s too late for that, here are some pointers. *
Don't ignore the calls and letters. Ignoring collectors is not an effective forestalling tactic. It will only cause your credit ratingto fall even more and may force the collector to employ more drastic means (such as lawsuits) to obtain payment from you. Even if you can't afford to make payments, it’s always better to be honest about your situation. Inability to make payments will not please collectors, but timeliness and honesty could persuade them to work out a payment plan that you can handle.
Learn the debt-collection process. In most cases, once your delinquent account has been turned over to a debt collector, it means that your debt has already been paid to your original creditor. The collection agency has purchased your debt from your creditor, probably at a reduced rate, and now owns your debt. Your original creditor has lost a little money, but not as much as they would have lost if you had defaulted entirely. The collection agency makes its profit when you eventually pay up.
Validate your debt. When you’re first contacted by a collection agency, make sure they’re legally authorized to collect your debt. Send them a letter requesting validation of your debt and confirmation that they’re authorized by your original creditor. If they fail to respond within 30 days, they’re in violation of the law. Requesting debt validation is sometimes little more than a stalling tactic, but it can often expose agencies that fail to live up to their legal obligations. It can also be a complicated procedure.
Keep accurate records. This could provide some advantage in disputes over how much money you owe, as well as protect you in cases of identity theft. Pay only what your records say you owe. Never pay a disputed debt just to make collectors go away. Debt collectors are not infallible and sometimes encounter legal problems themselves when their own information is inaccurate. If you inform them that your records contradict theirs, or that you have been a victim of identity theft, they’re legally obligated to investigate such claims.
Write it down. Maintain an accurate record of the dates and times you receive calls from debt collectors, including instances when they leave a message on your voice mail. Note what was discussed during phone conversations. Be specific, especially if you feel you have been threatened or verbally abused. Deal with collectors via snail mail as much as possible, as this ensures an accurate record of all information exchanged. Send copies of your letters to both the collection agency and your original creditor, and request return receipts for everything sent.
Don't be afraid to complain. If you feel you have been the victim of abuse, or if the collector has violated the terms of the FDCPA, contact a consumer attorney, your state attorney general, a consumer-protection agency or the American Collectors Association. You can also contact the Federal Trade Commission or the Better Business Bureau, though these agencies often lack the resources to take legal action except in cases of extreme abuse.