Dealing with a debt collector can be a difficult and upsetting experience. The main purpose of collectors is to recover the debt because they keep a percentage of all collections. Some unscrupulous collectors in the past have threatened borrowers, called at all hours of the day and night, pretended to be someone else and contacted friends and family, in the hopes that constant harassment would lead to payment of the debt.
In the United States, the Fair Debt Collection Practices Act (FDCPA) now regulates the actions and behaviors of third party debt collectors in order to protect debtors from harassment and underhanded collection tactics. The Act outlines specific practices that are disallowed in collection efforts. However, it does not apply to a creditor's in-house collectors. Many states have their own debt collection regulations that may restrict collectors even more.
What Collectors Cannot Do
The FDCPA limits the methods that collectors can use to contact debtors. They can only call between 8 a.m. and 9 p.m., and not a times deemed inconvenient to you, the consumer, unless you have given them permission to call you at other times. They cannot call repeatedly in a short period of time in order to harass you. Collectors cannot threaten that you will go to jail or that they will make the debts public. They also cannot call your employer about your debt, unless it represents unpaid child support. If you tell collectors not to call you again, they are legally not allowed to do so, but their collection efforts can continue.
Debt collectors may imply that they can garnish your wages or take other personal property to satisfy the debt. In order for that to happen, they must sue you in a court of law and obtain a court judgment. The federal government is one of the only creditors allowed to garnish without such a judgment.
If you have provided collectors with post-dated checks to satisfy the debt, they cannot try to cash the checks early, even though banking rules allow people to do so. They also cannot charge you any fees, penalties or interest that was not agreed to in the original contract with the creditor.
Protecting Your Rights
Never give anyone, including a debt collector, personal or financial information over the telephone. Legitimate debt collectors will not ask you for bank or credit card account numbers. Always confirm with the company you owe the money to that it has turned over collections to this company. Scammers often pose as debt collectors to make some quick cash. Never pay anyone or any company that you have not verified as legitimate.
Reporting a Debt Collector
If you are being pursued by a debt collector who is breaking the rules of the FDCPA, you can report them to both your state Attorney General's office and the Federal Trade Commission. You may also be able to sue the debt collector if their collection practices have resulted in financial or personal damages.
The Bottom Line
If you have to deal with a debt collector about unpaid bills or accounts, know the limits of the methods of collection they are afforded. Always be sure to protect your financial information and make no assumptions about the legitimacy of the company until you check it out. Call your creditor to make sure the debt collector is working for them. You can report any violations of the FDCPA to both state and federal legislators to ensure that the collector follows the law in the future.