Are you the victim of unfair debt collection practices? If you can answer yes to any of the following questions, you may be the victim of unfair debt collection practices.
- Are you being hounded by a debt collector?
- Is the collector calling multiple times a day?
- Has the collector contacted your employer or your relatives?
- Has the debt collector threatened you or used profane language?
- Do you feel humiliated?
- Do you wonder if there is any way to make this stop?
Fortunately, there are things that you can do to make it stop, and maybe even get damages or reimbursement for your trouble.
Many people plagued by unfair debt collection practices are under a great deal of stress, often because of loss of income, divorce or medical issues. Heaping harassment on top often leaves the borrower feeling completely defeated and without sufficient energy to pursue a course of action to stop the collection activities or bring the perpetrators to justice.
As a borrower and victim of these practices, you do have rights. You also have remedies. If you are suffering from a collector’s attempts to intimidate you unfairly, here are some steps you can take. If you play your cards right, you might even be able to put a little money in your own pocket.
1. Know Your Rights
Learn about the federal Fair Debt Collection Practices Act, who it applies to and which acts are prohibited. You can also find information about debt collection practices on the websites for the Federal Trade Commission, the Consumer Financial Protection Bureau, the office of the attorney general in many states and even the websites for private consumer attorneys who represent borrowers in unfair debt collection actions. Know that it is possible for you to negotiate with your creditors and settle your debts.
2. Always Act Calmly and Deliberately
In dealing with debt collectors, take the high road. Money is very motivating. Debt collectors often work on commission. The more they can get out of your pockets, the more money they can put in their own pockets. As you peruse the list of prohibited acts, you might be tempted to think of unscrupulous debt collectors as bullies. They often are. Intimidation can be a very effective debt collection practice, especially when the borrower does not understand his or her rights.
When you deal with collectors over the phone, do not strike back. As hard as it may be, keep an even demeanor. Take in what they tell you. Make no promises that you cannot keep. Tell the truth. Do not try to intimidate them. You will not win at that game.
But, if you keep a cool head, the collector cannot come back later and claim that he was just trying to defend himself. Assume that every collection call is recorded. The more he gets riled up, the worse he looks, especially if you're not giving him tit for tat.
3. Keep Records
For the most part, debt collectors use postal mail and the telephone to contact borrowers, although more and more we see email and text messages. Actual mail documents will speak for themselves. Keep all correspondence, account documentation and statements.
When you talk with the collector, get the collector’s name, call back number, and the company for whom he or she works. Make notes on the interaction. These notes will be invaluable if you have to make a complaint or file a lawsuit against the collector.
Virtually every collection call you receive will be recorded by the collection agency, but some people go so far as to record their conversations with their bill collectors. There are many inexpensive adapters that you can use with your cell phone or landline phone. Under federal law and in many states it is legal for you to record the conversation without getting the consent of the other people on the call. This is called the one-party consent law. But, in some states, that is illegal. Those recordings would be of limited use to you, and you could find yourself in trouble for having secretly recorded the conversation. Before you try this, learn the recording law in your state.
4. Ask for Verification of the Debt
Once he's contacted you, the debt collector has five days from the initial contact to provide you with the following information about the debt. That communication, usually in writing, must tell you:
- The amount of the debt;
- The name of the creditor to whom the debt is now owed;
- That you have 30 days to dispute the validity of the debt;
- The collector will assume the debt is valid unless you dispute it within 30 days;
- If you dispute the debt within 30 days, the collector will send you information that will allow you to identify and verify the debt;
- If you send the collector a written request within 30 days for the name and contact information for the original creditor, the collector will provide it.
If you dispute the debt or request verification or validation of the debt, the collector must stop all collection activity until it has sent you verification of the debt. This applies to lawyers trying to collect debts for clients, except that a lawyer can start or continue a lawsuit.
Why Is It Important to Dispute the Debt?
You should dispute the debt or ask for verification so that you will know who and what you’re dealing with. Often when an original creditor cannot or will not get satisfaction of a debt, the creditor will charge it off its books and sell the debt for pennies on the dollar to a collection agency or to a company or individual who specializes in buying accounts on the cheap. Debt buyers make their money by getting you, the borrower, to pay more than the debt buyer spent to purchase the account.
The account can change hands several times. Often, the only information the debt buyer receives is the name of the last owner of the debt, your last known contact information and the amount of the debt. If you receive a demand letter from Midland Funding for $3,107, you may have no idea that the account was originally a Wells Fargo Mastercard. When you dispute the debt, the current owner must research the account, validate the amount you owe, and provide you with the name and amount of the original owner of the debt. If nothing else, this can give you some breathing space. Often, it will give you a chance to research your own records and provide proof to the new owner that the account has been paid off or that you owe an amount different from what they are demanding.
What If the Creditor Cannot Validate the Debt?
If the collector is trying to collect more than you owe, fails to verify the debt, continues to contact you while the debt is being disputed, fails to provide you with the name and amount of the original debt, the collector is violating the Fair Debt Collection Practices Act. The more opportunities the collector has to violate the FDCPA, the more you may come out ahead in the end.
5. Tell the Creditor to Stop Contacting You
Yes, it’s true. You absolutely can tell the collector to leave you alone. There is a process, a proper way to do it, and it is important that you understand the effect of your demand and the consequences you can expect to come out of it.
Just because the collection agency isn’t communicating with you doesn’t mean that it has given up on you. There’s a fair chance that the collector will just turn the account over to a lawyer for a lawsuit. This is more likely the larger the account. If a law firm has the account, they must contact you with any suit papers they file. But they and the collector are not under any obligation to warn you that the account is being sent to the attorney for legal proceedings.
There is always the chance that the lawyer will not have up-to-date contact information for you, or the suit papers will not reach you. If you never answer the suit, the court can enter a default judgment against you. Lawsuits are much easier to defend before a judgment is taken than after.
Even if the collector chooses not to send the debt to a lawyer, the collector may have little choice but to sell the account to another debt buyer. When another collector enters the scene, you will have to start from scratch to verify the debt and send a new cease and desist letter.
If it is more important to you to enjoy a respite from the haranguing, than by all means do this:
Send a written letter to the collector demanding that the collector cease and desist from further communications with you, your relatives, your employer or anyone else the collector may be contacting. Telling the creditor over the phone to stop calling is not sufficient under the FDCPA. Send it by certified mail so that the recipient has to sign for it. That way, if the collector continues to contact you, each instance of contact is yet another violation of the FDCPA.
Once the collector receives a letter from you demanding that they stop communicating, the collector is obligated under the FDCPA to cease communications with two exceptions:
1. the collector may send you a letter to inform you that they are ending communications, or
2. the collector may send you a letter to inform you that they are sending the account to an attorney to institute legal proceedings.