This section addresses your rights with regard to creditors in their attempts to collect on past due or delinquent accounts. I will explain your basic rights that you have as written in a very important document called The Fair Debt Collection Practices Act.
The Fair Debt Collection Practices Act states that debt collectors have to treat you fairly and it protects you from abusive methods of contacting you and trying to get you to pay your bills. Personal, family and household debts are covered in the act. This includes car loans, medical bills or charge accounts.
Let’s identify who debt collectors are. A debt collector is a person who regularly collects debts owed to others, this can include attorneys who collect debt on a regular basis. Under the guidelines of The Fair Debt Collections Practices Act debt collectors are governed by a set of rules designed to protect you. These rules are as follows:
A debt collector may contact you in person, by mail, by telephone, telegram or by fax. Debt collectors are not allowed to call you before 8 AM or after 9 PM. A debt collector is not allowed to contact you at work if the collector knows that your employer does not want them to contact you there.
You can stop a debt collector from contacting you by writing a letter to the collector telling them to not contact you anymore. I have found it to be very useful to send all such mailed correspondence via return receipt certified mail from the post office. This way you have legal proof that the debt collectors office did indeed receive the letter. After the collector receives this letter they are allowed to contact you one more time to let you know that they have received the letter and that they will not contact you again. The debt collector will most likely present you with what further action that they will take to try to collect the debt from you, this could include plans for action from a court. Keep in mind even though you send this letter and stop the collector from contacting you that you do still owe the debt and that this action could very well push the collector into a different form of collection.
Debt collectors are allowed to contact other people in attempt to find you. Debt Collectors often find and contact neighbors, friends or acquaintances, relatives and employers. In most cases they are only allowed to contact third parties once and they are not allowed to go into detail with these third parties regarding the debt that you owe. Debt collectors are allowed to contact and discuss your situation with any attorney or Debt Management Program representative that you hire and give permission to handle the accounts in question.
After a debt collector initially contacts you they have five days to send you written notice telling you the amount of money that you owe, the name of the creditor that you owe money to and what action you must take if you feel that you do not owe the debt.
If you feel that this debt is being reported in error you must immediately send them written notice to this affect. Again, I suggest using certified return receipt mail via the post office and be sure to include copies of any proof that you have that the debt was paid or is not yours such as canceled checks that were used as payment etc. By the way, this is called disputing a debt and this practice is covered in another section of this website pertaining to legally cleaning up credit reports.
The debt collector can then contact you up to thirty days of receiving your letter stating that you do owe the debt. The debt collector must then send you proof that you owe the debt such as a copy of a bill for the money that is owed. The debt collector will then notify you of their next course of action regarding collecting on the debt and then they will start collection activities again.
OK, now here’s what debt collectors are not allowed to do:
Debt collectors are not allowed to threaten you with violence, publish your name on a list of debtors who do not pay their bills, (except to a credit bureau) they are not allowed to use foul or obscene language and they are not allowed to harass you by telephone.
Debt collectors are also not allowed to identify themselves as attorneys if they are not or to imply that you have committed a crime. They are not allowed to tell you that they work for a credit bureau or to misrepresent the amount of debt that you owe. They are also not allowed to mislead you into thinking that paperwork that they send you are legal forms if they are not or that legal forms that they send to you are not of a legal nature.
Debt collectors are not allowed to tell you that you will be arrested if you do not pay the debt. They are not allowed to threaten to garnish, seize, attach or sell your property or wages unless they intend to actually file legal papers to do so.
Debt collectors are not allowed to make you pay more than the original debt that is owed unless the laws in your state allow them to. They are also not allowed to deposit a post dated check before the date written on the check or to withdraw funds electronically without your permission. If you owe more than one debt with a particular agency they are not allowed to take a payment from you and apply it towards an account other than the account that you specify.
In my decade of working in the credit industry I have unfortunately seen many, many, instances of debt collectors breaking many of these laws and rules. This is not to say that there are not many good and decent people working as debt collectors because I have run into many kind hearted folks trying to collect on past due accounts in fact, many of them have referred clients to me for help. Sadly it is a fact that the debt collections industry as well as the Debt Management industry are both riddled with offices and representatives who will stoop to any level to get what they want. Please keep in mind that the vast majority of people working in these offices work on a commission basis. If they collect money from you they get paid if they don’t collect money from you they don’t get paid and they face the consequences of not producing in the offices in which they work. This is called motivation and believe me these people are motivated to make a paycheck.
If you feel that your rights have been violated or that you have been subject to unfair or unethical collection tactics here is what you can do:
Document all phone calls and communications that you have with the debt collector or the office that is trying to collect from you. Write down names, dates and times. Keep any paperwork that you receive from the office as well. This is very important and a well documented account of what has happened to you along with you always remaining calm and focused during any contact will help you to make your point and look credible in the eyes of the offices that you will be explaining your circumstances to.
If you feel that your rights have been violated you have the right to sue the collector in a state or federal court within one year that the law was violated. If you win you may recover money for the damages that you have suffered as well as an additional amount up to $1000, court costs and attorneys fees. A group of people abused by the same company can band together and collectively sue the collection company for up to $500,000 or 1% of the collection agencies net worth, whichever is less.
Please report any problems that you have with your State Attorney Generals Office and with the Federal Trade Commission. Laws may vary from state to state and your State Attorney Generals Office will help you to understand your rights.