When debt collectors call, hang up
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My 80-something father was recently disturbed by some calls he was getting regarding debt collection. Why are they calling me, he wondered?
At first, he was worried because he was unsure if he had forgotten to pay a bill or had co-signed on a loan for a sibling. I told him that debt collectors can’t call you for something you don’t owe. If there was something due, they would have to send you something in writing. It was probably a scam. He ignored the calls and they stopped.
Debt harassment is a perennial problem, yet most people get intimidated when they get these calls, particularly this time of year. You have many rights, but most people don’t understand what they can do to protect themselves.
The Fair Debt Collection Practices Act is actually one of the better consumer protection laws on the books. Policed by the U.S. Federal Trade Commission (FTC), it has a number of safeguards that are designed to prevent harassment.
The FTC logged almost 120,000 debt collector complaints in 2009, which was up slightly from the previous year. Most of the inquiries involved in-house or third-party collectors, who make money on getting consumers to pony up.
You don’t have to endure abuse from collectors. Here are some of the major ways that they try to hound you and what you can do:
Outright harassment.
Nearly half of the complaints filed with the FTC involved repeated calling at odd times. Some collectors even used threats of violence. Under the debt collection act, they are not allowed to call you at inconvenient times, use obscene language or threaten you in any way. If you are being threatened, call your state attorney general’s office.
Collecting a debt that is not due.
Many collectors have the wrong information or want a payment that is overbilled. You have a right to review and challenge all claims against you, but get the written documents. Don’t do anything over the phone.
Calling your workplace.
They can’t call you at work. Again, tell them to submit any claims by mail.
Disclosing debts to third parties.
The only thing collectors are allowed to do is to use other people to locate you. They can’t discuss your debts with neighbors or family members.
Failure to send written notices.
As I mentioned earlier, they have to send you exactly what the claim is, the amount owed, to whom it is due and whether it’s been verified. Of course, you can dispute any of this information. You need the paperwork to deny their claims.
Failure to stop calling you.
Once you submit a dispute in writing, they are not supposed to call you anymore. You can also request that they “cease all communication” or refuse to pay the debt, but this won’t stop creditors from taking you to court. If you can’t pay the debt, it’s best to talk with them directly to work out a repayment plan. Bankruptcy is another option.
Still being hounded? You can cite them the law or complain to the FTC. A good guide to battling unjust debt collectors is Fred Williams’s “Fight Back Against Unfair Debt Collection Practices” (FT Press, $21.99).
Whatever you do, don’t sign up for a debt reduction or repair service. These firms will charge you money to do something you can do yourself. You can usually negotiate with creditors and don’t need a third party.
Even if you are just now going through a stack of December credit card bills as I am (yikes), what should you be looking for?
Check for unwarranted fees that are tacked on or changes in your finance rate. Were you over the limit on your charges for the month? Did the bank wrongly assess a late fee?
Keep in mind you can dispute all fees and ask that they be removed. If you don’t get satisfaction, take your business elsewhere — after you pay your bill.
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Just tell them you’re recording the call (even if you aren’t). That will really give them pause.
Complaining to the FTC does nothing. I have had a $100 charge to my ccredit report for over two years, the collection agency will not validate the debt. I filed a complaint with my state attorney generals office to validate the debt, the collection agency lied and said they had already validated the debt. The law serves no one but the collection agencies.
While the FTC and attorneys general may not intervene, if enough people complain, it will trigger an investigation. Unscrupulous debt collectors know that agency officials are outmanned and count on consumers not complaining. Keep on pressing your case with documentation. The truth will triumph.
I was harrassed by a collections agency as the result of identity theft several years ago. I told them it wasn’t my debt and they can’t force me to pay something that I didn’t owe. They told me point blank they can do what they want, ruin my credit, and take money out of my accounts if I didn’t cooperate.
The Government never prosecutes these people, so they have no fear. Almost like politicians, they are above the law. The law is for little people in the USA, not the powerful or their lackeys.
If you are an attorney, and you have idle time, you can file suit against the original creditor for some absurd amount of money and harass them back. But for ordinary people? You should already be used to such abuses. Suck it up. No one cares.
Step one, never admit you owe the debt.
Step two, dispute the debt in writting (and order them to cease and desist any phone communication with you).
Step three, demand that they send you a detailed bill defining where the debt(s) originated, and the original terms and documentation of the loan (If they can not produce it, they can not collect).
Step four, every state has a statute of limitations. If there has been no activity on the debt for that period of time, the debt collection company can take no negative action, though you still owe the debt. Just ignore them and write them to tell them to cease and desist all actions. They can not take you to court if this is the case either
Step one, never admit you owe the debt.
Step two, dispute the debt in writting (and order them to cease and desist any phone communication with you).
Step three, demand that they send you a detailed bill defining where the debt(s) originated, and the original terms and documentation of the loan (If they can not produce it, they can not collect).
Step four, every state has a statute of limitations. If there has been no activity on the debt for that period of time, the debt collection company can take no negative action, though you still owe the debt. Just ignore them and write them to tell them to cease and desist all actions. They can not take you to court if this is the case either
Debt collectors are really awful and most have little common sense. I was harassed for 2-3 yrs. for $25 from 5/3 Bank. I technically owed the debt, but on principle I refused to pay it. I paid off a car fleece and the very last payment was a day or two late so they stuck me w/the late fee. I was NOT going to pay a late fee after paying these jokers $437/mo for 4 freaking years!! Yet they called and they called and billed and billed. I usually just didn’t answer the phone and threw the bills in file 13. At last they gave up. But I know for a fact that they paid FAR more to try to collect that $25 than the $25 owed. Same thing w/a dr. office. They billed me for a “no-show” fee of $20 and are still billing me 3 yrs. later. Again, costing far more to try to collect it than the bill was worth (probably in postage alone!)
The problem with bille collectors is that their methods (inflaming our emotions, trying to upset us so that we will agree to pay) are effective with some people. Think of little old 70 and 80 yr-old people. They don’t want to owe anyone anything. Collector calls and says they owe a bill and they don’t remember whether they paid if off or not. So they send in the money. Or calling family and friends. Grandma knows that it’s a debt collector trying to find her grandson who didn’t pay his car note, so they try to help and agree to send money It’s really terrible. I listen to Dave Ramsey almost daily and I have learned a lot about debt collectors.
Another thing – if you are unable to pay them, you can’t! There is no reason to discuss anything with them. If you start a conversation w/them, they will press you for a payment or a promise of a payment. ALWAYS! Once you’ve explained that you cannot pay and that you will when you can, HANG UP. Forget being polite!
As long as people are easily coerced into sending them money, they will continue these tactics.
I was ludicrously harassed after giving a courtesy call to a credit card company following my father’s death. The collector was vicious and completely out of bounds. I looked up the company to find a slew of FTC complaints were filed against them. Intuitively, I did what neeros and others recommend; I never answered their calls again. After about 20 months, the calls stopped coming. Thank you to all who posted solutions to this invasive problem for we “commoners.”
One of the best ways to put a collector on guard and get them to approach with caution is to ask them to validate the debt.
If you say this, they will recognize you understand your rights and the law. Do not communicate by phone, send them a credit dispute letter asking them to validate the debt.
They either will or may drop pursuing the matter. If they do send another letter requesting them to update your credit report for deletion.
Best advice: NEVER TALK TO A BILL COLLECTOR on the phone.
Only communicate with them via USPS
The best tool to use to communicate with a bill collector can be found by doing a search on Google for:
“Bill Collector Terminator Letter”