Here’s how to protect yourself when you are called or contacted by a debt collection agency.

Calls from a Debt Collection Agency can be a horrible experience.  Some agencies try to collect a debt by harassing you or a family member. Debt collectors may have contacted you at inappropriate times of the day, night or weekends. Some Collection Agencies violate your rights by making threats to garnish your wages or have you terminated from your job. I never quite understood the termination threat because, if they are the cause for your job loss how can you repay the debt? Nevertheless, the abusive and disrespectful tactics that these agencies used to collect a debt must be stopped.

The Federal Trade Commission

The Federal Trade Commission enforces the Fair Collection Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts.

The Consumer Finance Protection Bureau (CFPB) is currently proposing regulations to clarify, modernize, and implement the Fair Collection Practices Act. I hope that these proposals will give improved protections against harassment by debt collectors and straightforward options to address or dispute debts.

In the meantime, I suggest that you use the current FDCPA and take these steps when contacted by a collection agency.

• Ask identification for the person calling, their agency, its address, and telephone number. If you desire to record the phone call always inform the caller at the beginning of the conservation.
• Insist that all communication goes through you unless you hire an attorney.
• Request that all future contact be handled by mail. Send the debt collector all further correspondence by certified mail with a return receipt requested. You will have to pay for the certified mail but this small step is for your protection. It also lets’ the debt collector know that you are taking their behavior very seriously.

Create A Paper Trail

• Ask for all conversations to be followed up in writing.
• Take detailed notes of all conversations, correspondence, and pre-recorded calls. Be sure to note all names, dates, times and your location.
• Document any false, misleading or harassing statements. Include them in your correspondence.
• Ask for full details about any debts that the collector claims you own. Get dates, amounts and the lender’s name. The collector is required by law to tell you information that includes the name of the creditor and that you can dispute the debt.
• Retain all records indefinitely in case there’s a future dispute. Long term record keeping is very important because debt collectors can sell your debt to another collector. The collection process could start all over again if this happens.

You Have Reached an Agreement

• When agreeing to settle the debt, have them verified it in writing. That includes their promises of removing or adjusting reports to your credit history.
• If you feel you’ve been contacted in error, send a letter disputing a debt in writing. Your letter should include the following information. Ask the agency to stop contacting you. If the agency can’t provide proof you owe the money, by law, they must stop collection efforts.
• If you don’t owe the bill, don’t pay anything — ever. Even if you’re willing to pay cash so the agency will go away, it’s not a good idea. Payment is considered acknowledgment that you are responsible.
• Avoid sending debt collectors personal checks. This gives them your routing and account number. In the event of a judgment, they now have your routing number and account number to take the funds.
• Most importantly, if you owe the money and you’re falling behind, it’s time to meet with a financial coach.

One, important exclusion from the fair debt collection law is so-called in-house collection departments. These are the collection divisions of banks, retailers or other credit issuers. Customers who miss one or two monthly payments may be called or received letters from these in-house collection agents.

However, laws that protect consumers from abusive language, threats, and other unfair practices when dealing with third-party debt collectors do not apply for in-house collectors.

Nevertheless, apply the same steps when dealing with in-house collectors. You may not get your desired results, but you will let them know that you are not a pushover.

One Last Point

Not all debt collectors are bad people. You should never be afraid or reluctant to take a debt collector’s call or read letters about debts that you owe. I encourage you to face the facts and deal with debt collectors, but also know and understand your rights and protections.

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