When debt collectors contact you about a debt, you have rights. Debt collectors that collect credit card debt, auto loans, medical bills, student loans, mortgage, and other household debts must obey Fair Debt Collection Practices Act rules. The law prohibits debt collectors from using abusive, unfair, and deceptive practices and they are not allowed to harass or threaten you. We’ve gathered some useful information for you to know when dealing with a debt collector.
Debt collectors can make contact by phone, letter, email, or text message to collect the debt as long as they follow the rules and disclose they are debt collectors. It is illegal for any debt collector to misrepresent who they are, such as falsely claiming to be an attorney or government agency. Debt collectors are prohibited from contacting individuals before 8:00 a.m. or after 9:00 p.m. or at inconvenient places, unless you agree to it. They may not contact you at work if they are told collection calls are not allowed. You have the right to ask a collector to stop contacting you or cease using a specific method of communication.
What the Debt Collection Must Tell You
Any debt collector that contacts must provide you with basic information including:
- The name of the creditor you owe
- How much money you owe
- That you can dispute the debt
- How to get the name and address of the original creditor, if different from the current creditor
This information has to be provided when the debt collector first contacts you or in writing within five days of the initial contact. It is extremely important to respond to debt collection notices. If you don’t respond the debt collector may sue you or take other actions to collect the debt. Before providing any payment or personal information, verify the debt and debt collector.
Is the Debt Collector Legitimate?
When the debt collector first contacts you, ask for their identity and verify it. Ask for their name, address, phone number, email address, and website. Legitimate collectors will provide this information. You can also ask if the business is licensed to provide debt collection services in your state and if so what their license credentials are. If they are contacting you from outside your state, ask if they have a license in the state they operate from. Search the internet for complaints and reviews of the business.
Validate the Debt Information
If you do not recognize or need more information about the debt, contact the debt collector in writing for validation. Upon receiving validation of the debt check that the information is correct. You may also contact the original creditor for information. Some things you may ask for are:
- the account number
- a copy of the written agreement or invoice that created the obligation to pay
- a copy of the last billing statement sent by the original creditor
- information on when the debt became due and payments made on the account
- how the amount owed is calculated, including any additional fees or charges added
- if the debt belongs to someone else, the name of that individual and proof that you are responsible for the debt
Disputing the Debt
If any of the information is incorrect, dispute the debt in writing within 30 days. When you dispute the debt the debt collector must cease collection efforts until they can provide verification of the debt in writing. If any of the following applies, you should file a dispute:
- You do not owe the debt;
- You’ve already paid or settled the debt;
- You want more information about the debt; or
- You want the debt collector to stop contacting you or to limit its contact with you.
Disputing Debt That is Already Paid
If you have paid the debt or don’t owe it, inform the collector in writing that you are not responsible for the debt. Include in the letter why you do not owe the debt and request that they place on record that you dispute having any obligation for the debt. You may also request that they notify any other party involved in the collection of the debt, including any credit reporting agency, that you dispute the debt. You can request that the debt collector stop contacting you, unless they can show evidence that you are responsible for this debt.
If you are a victim of identity theft and the debt was incurred by someone impersonating you, notify them of this. You will have to submit documentation to support your claim of identity theft. If you notify the debt collector of this orally, they must notify you that your claim must be in writing. Once you notify them in writing, they will have to let you know what documentation the law requires you to submit to support your claim of identity theft.
Paying the Debt
If you owe all or part of the debt, ask how you can pay it. If you simply cannot pay what you owe, tell them that. They may be willing to work with you. Try to negotiate the best settlement you can for yourself. Here are some of the things you may be able to bargain for:
- Forgiveness of interest, finance charges, collection charges, or other charges if you pay in full by a certain date.
- Waiver of any claim the collection agency may have against your property, such as your home or car, or against someone who co-signed for you when you incurred the debt.
- Installment payments that would require specific payments on pre-arranged dates to satisfy the amount owed.
If you come to an agreement with the debt collector, get it in writing. Make sure you know who to pay, where payment should be submitted and the due dates.
Prohibited Threats and Actions
A collection agency may not make these threats against you:
- To use physical force or violence, or any other criminal means to harm you, your property, or your reputation.
- To accuse you of committing a criminal offense if you don't pay, when the accusation would be false.
- To garnish your wages, seize your property or arrest you, unless they can do so legally and intend to do it.
- To communicate to anyone information (other than nonpayment of the debt) that will defame you.
- To take possession of your property by non-judicial action unless they actually intend to do it.
- To communicate credit information about you that they know, or should know, is false.
- To take any other action that cannot legally be taken or that is prohibited by law, or to threaten any action they do not actually intend to take.
Aside from communicating with the debtor’s attorney, a collector may contact a third party only to locate the debtor’s address, home telephone number, and place of employment. They are typically prohibited from contacting third parties more than once and they are generally not permitted to discuss the debt with anyone other than the debtor, their spouse, or attorney.
How to Report a Debt Collector
If you believe a debt collector has acted illegally or unfairly you can report them to:
File a Complaint with BCA Against Unlawful Debt Collectors
File a complaint with Business Consumer Alliance against unlawful or unfair debt collection practices. You can also seek legal advice to file a lawsuit against a debt collector in state or federal court. For more information on debt collection rules, check out our blog here. Make sure to share this blog and check out our Facebook page to keep updated on scams, tips, and more.