Are collection agents treating you fairly? If not, fight back!
By Dana Dratch • Bankrate.com
If you're being hounded by bill collectors, you're not alone. Last year, an estimated 95,933 people were turned over to third-party collection agencies, according to data from ACA International, the Association of Credit and Collection Professionals.
Don't be intimidated.
The Fair Debt Collection Practices Act protects you if your creditor has given your account to a third-party collection agency.
Collection agents may not:
Call before 8 a.m. or after 9 p.m.
Talk to anyone but you (or your attorney, if you have one) about the debt.
Threaten to garnish wages or seize property unless they actually intend to do so. Garnishment is illegal in some states, and in others requires a court order. In many cases, property seizure is not permitted. Check with your state attorney general's office or state consumer protection office to find out what is legal in your state.
Threaten to sue unless they are actually taking legal action. In some states, third-party collection agencies may not sue.
Threaten you with arrest or jail.
Use obscene language.
Annoy or harass you with repeated calls.
Call at work if you have asked them to stop.
Lie about their identities. They must give their real names and the name of their company. They may not falsely claim to be an attorney, a representative from a credit bureau or a member of law enforcement.
Ideally, a collections call should be no different than the calls you make at work each day.
"It should be a business call," says Kathy McNally, vice president with the National Foundation for Credit Counseling.
Instead, some consumers are berated, made to feel guilty or worthless, or goaded into anger or tears.
"What I tell my clients is that collections agents are pretty skilled in pushing psychological buttons," says Joanne S. Faulkner, a consumer law attorney based in New Haven, Conn. "They get you mad so that you say something they can use ... or they'll make you so desperate you'll promise them something."
But you don't have to take anyone's abuse. Here are some things you can do:
Remedy #1: Don't take the calls. You can hang up, screen calls or stop them from calling entirely with what's known as a "cease and desist letter." If you send a "cease and desist," include your name, address and account number, and tell the company "do not contact me further about this debt." Send the letter certified so that you have proof the company received it. But this move doesn't cancel your debt. The original creditor or the collection agency may decide to sue, or the creditor can simply hire another third-party collector.
Remedy #2: Keep a diary. If you do take the calls, write everything down: dates, times, names (even if it's the ubiquitous Ms. Smith or Mr. Jones) and what is said. If it's legal in your state, tape the exchange. And if you tell them you're taping the call -- whether you are or not -- they will be more likely to behave.
Remedy #3: Negotiate to pay the debt. Once a debt goes to collections, you may be able to work out a deal to pay less than the full amount. "A collections agency is always authorized to take something less than 100 percent," says Faulkner. "Usually 50 to 60 percent."
Whether you pay in full, negotiate for a percentage of the debt or accept a payment plan, and get everything in writing before you give them any money.
Make them stipulate that they will not report anything negative to the credit bureaus regarding the debt. And have your original creditor sign off on the deal. A collection agency could offer to settle that $1,000 credit card bill for just $500. But once they're paid, the original creditor can still come after you for the other $500.
One warning: If you negotiate a settlement for less than you owe, you could end up paying taxes on the unpaid portion. But if the unpaid amount is less than $600, a collection agency does not have to report it to the IRS. Make this part of your written agreement.
Always pay with paper checks -- not electronic bank drafts by phone or debit cards. It's to your advantage to have a physical record that you've paid, plus you control exactly what you're paying and when. Faulkner had one client who authorized a $300 draft from his bank account, only to have collection agents take $500. "He didn't have $500 and had to change bank accounts so that they wouldn't do it again," she says.
Be sure to get something in writing when the debt is paid. "That way, if it does come up on your credit report, you have something to prove it was paid," says Joyclyn Kyle, director of housing for the Philadelphia office of the Association of Community Organizations for Reform Now.
Remedy #4: Understand the laws in your state. Garnishment, lawsuits and property seizure are illegal in some places, which gives you a little more leverage to work out a deal. To learn what is and isn't allowed, call your state Attorney General's office or the state consumer protection office.
But third party collectors have a choice: they can operate under the laws of your state or those of the state where the debt originated, usually interpreted as where you were living when you opened the account, says William Haynes, attorney with the FTC's division of financial practices.
Also, time may have run out on the debt. While there is no federal statute of limitations on debts, most states limit the amount of time a creditor has to collect a debt. However, that deadline varies from state to state.
There is also a question of which state's rules govern the transaction, yours or the creditor's. That's a very gray area, notes David A. Szwak, an attorney who specializes in consumer credit litigation and testifies as an expert in similar cases. He recommends that consumers check with their local state authority or an attorney in their state who specializes in this kind of law.
Remedy #5: File a complaint. If you suspect that a collection agent has crossed the line, call the FTC and your state's governing office and file complaints. (Yet another reason it's good to keep a written or tape-recorded diary.)
Remedy #6: Sue. If a third-party collection agency violates your rights, you can sue for actual damages and punitive damages, as well as attorneys' fees and court costs. To find a lawyer who specializes in consumer credit law, contact the National Association of Consumer Advocates.
McNally believes that most collectors stay well within the bounds of the law. When they don't, she says, "It's really important for all of us to stand up for ourselves."
Dana Dratch is a freelance writer based in Atlanta.
- General Discussions, Forum Registration, and ID Theft and Credit-Related News Stories
- General Discussion
- News Stories on Identity Theft, Personal Data Thefts and Credit Reporting Abuses
- Current Cases
- Lawyer Jokes
- FCRA Statute and Defined Terms Under the FCRA
- FCRA Statute And Amendments: 15 U.S.C. 1681, et. seq.
- What is a Consumer [Credit] Reporting Agency?
- What is a Consumer [Credit] Report?
- Resellers: Who are They? What Do They Do? Are They Liable Under the FCRA?
- Investigative Consumer [Credit] Reports
- Who is a Furnisher?
- How to Get Your Credit Reports and How and Who to Write Your Dispute Letters to
- How To Get Your Credit Reports
- Dispute Letters
- Do You Have To Pay For Your Credit Report?
- FCRA Private Rights of Action and Duties Imposed by the FCRA
- Impermissible Access: 15 U.S.C. 1681b[f] and 1681q
- Front End Duties of the Credit Reporting Agencies: 15 U.S.C. 1681e(b)
- Back End Duties of the CRAs: 1681i[a]:
- Credit Bureau's Duty to Provide Consumer Documentation to Furnisher: 1681i[a][B]
- Duty to Add a Consumer's Dispute Statement in Association with a Specific Account and In Connection with the Credit File/Report: 15 U.S.C. 1681i[c]
- Furnisher FCRA Liability: 15 U.S.C. 1681s-2
- Failing to Mark Contested Accounts As Disputed: 15 U.S.C. 1681s-2[a]
- Obsolescence: When Must the Credit Reportings Come Off of the Credit Report: 15 U.S.C. 1681c
- Duty to Notate Disputed Accounts As Such: 15 U.S.C. 1681c[f]
- Adverse Action Notice Rules: 15 U.S.C. 1681m and ECOA
- Credit Solicitations Are Required to be Clear and Conspicuous: 1681m[d]
- Potential Exposure For Sanctions Due to Filing Bad Faith FCRA Cases: 15 U.S.C. 1681n[c], 28 U.S.C. 1927, and Fed.R.Civ.Proc. 11
- Credit Repair Organizations Act [CROA]
- 1681g: Credit Bureaus' Duties to Provide Reports/Disclosures and to Add 100 Word Statements of the Consumer
- Affiliate Sharing Problems and Violations, 15 U.S.C. 1681s-3
- Common Credit Report Errors and Agency Misconduct
- Credit Errors
- Theft of Identity
- Mixed File Cases
- Re-Aging: Debt Collector's Efforts to Revive Obsolete Reportings
- Reinsertion of Previously Deleted Data: How and When Can It Happen?
- VIP Databases and Offline Status
- Deceased Reporting Cases
- Causation: The Crucial Link Between Breach of a Duty and Damages
- Causation to Damage [Proving Your Damages Are Related to and Caused by the Defendants
- Types of Damages, Remedies, and Awards Under the FCRA and Related State Law Claims
- Damages Under FCRA
- Punitive Damages: 15 U.S.C. 1681n
- Injunctive Relief: FCRA and State Law
- Attorneys' Fees, Litigation Expenses and Costs:
- Declaratory Relief Under the FCRA
- What is Your Potential Case Worth? Other Case Verdicts, etc.
- FCRA Jury and Bench Trial Verdicts
- Other Federal Laws Related to Credit Reporting, Data Privacy, Billing Errors and ID Theft
- FDCPA Statute And Amendments: 15 U.S.C. 1692, et. seq.
- Fair Credit Billing Act, 15 U.S.C. 1666, et. seq.
- Identity Theft and Assumption Deterrence Act of 1998, 18 U.S.C. §1028
- Home Affordable Modification Program (“HAMP”) and Home Affordable Foreclosure Alternatives Program (“HAFA”)
- State Law Claims Related to Credit Reporting, Billing Errors, Privacy Breaches and ID Theft
- Invasion of Privacy: State Law
- Defamation: State Law
- Interference With Prospective Credit: State Law
- Interference With Marital/Family Relations: State Law
- Infliction of Emotional Distress/Mental Anguish: State Law
- Data Breach Claims and Issues
- Unfair and Deceptive Trade Practices Claims: State Law
- Jurisdiction, Venue, Removal to Federal Court, Remand to State Court, and Other Pre-Trial Jurisdicti
- Removal of FCRA Cases From State Court To Federal Court
- Personal Jurisdiction and Venue in Credit Reporting Cases
- FCRA Litigation Strategies and Procedural Issues and Law
- Settlements, Releases, Prevailing Party Status, and Other Things You Need to Know If You Resolve Your Case Before Judgment
- Offers of Judgment In FCRA Litigation
- Secret Documents, Product Information and Testimony
- Choicepoint Secret Documents:
- Equifax/CSC and Affiliates Secret Documents:
- Experian Secret Documents
- Innovis Secret Documents:
- Trans Union Secret Documents
- Furnisher and Public Records Suppliers Secret Documents
- Respondeat Superior, Vicarious Liability, and Whether Others Are Liable
- Liability For Employee's FCRA Violations? Liability For FCRA Violations by Third Parties?
- FCRA Preemption, Immunity, and Qualified Immunity
- FCRA Preemption: 15 U.S.C. 1681t[b][F] and Related Discussions
- FCRA Qualified Immunity: 15 U.S.C. 1681h[e] and Related Discussions
- States/Govermental Immunity From FCRA Claims?
- Jury Voir Dire, Instructions, Verdict Forms, etc.
- Jury Instructions and Jury Verdict Forms
- Jury Questionnaires, Voir Dire, Jury Selection and Jury Bias
- Credit Card Issues
- Credit Card Liabilities
- Do You Have a Right to Bring Claims and How Long Do You Have?
- Statute Of Limitation: 15 U.S.C. 1681p
- Standing to Sue
- Credit Scores, Adverse Action Codes, and Other Report Codes
- Credit Scores, Adverse Action Codes, Risk Factors, Denial Codes and Other Scores and Codes Supplied by the Credit Reporting Agencies
- The Mechanics of Credit Reporting
- Public Records Reportings [Non-Bankruptcy]
- Bankruptcy Reporting
- Student Loan Credit Reporting
- Metro Tape [I and II]: Standardized Credit Reporting Formats Used by the Credit Industry
- Defenses Asserted by Credit Reporting Defendants
- What Law Applies? Problems Barring Use of the Court and Law
- Arbitration, Forum Selection, Choice of Law, Choice of Venue and Other Adhesionary Clauses
- Conflicts of Laws Issues in FCRA and Related State Law Issues
- Standing and Statutes of Limitations
- Statute Of Limitation: 15 U.S.C. 1681p
- FCRA Legal Forms [Suits, Discovery, etc.]
- Discovery: Interrogatories, Requests For Production of Documents, Requests to Inspect, Requests For Admissions, Deposition Notices, Subpoenas, Deposit
- FCRA Sample Pleadings: Complaints, Motions, Oppositions and Other Standard Lawsuit Filings
- Defenses Frequently Asserted by Defendants to Consumer's Actions
- FCRA Class Actions and Class Issues
- FCRA Class Actions
- Special Evidentiary Issues: What is Evidence?
- Evidentiary Issues in FCRA Cases
- Expert Witnesses, Special Issues and Daubert and Related Challenges
- Appellate Issues, Rules, Law, Etc.
- Defenses Asserted by Industry and Abuse Stories
- Defense Counsel Abuses and War Stories
- Law Outlines: Various Topics
Who is online
Users browsing this forum: No registered users and 2 guests