• 21
  • October
    2011

Being in financial distress is stressful, particularly with the constant harassment in the form of letters and phone calls from debt collectors. The pressure seems to only get worse as soon as the debt is handed off to a third-party collection agency.

Fortunately, consumer protection laws exist to stipulate what collection agencies can and cannot do when it comes to collecting debts. Understanding these laws can empower consumers to protect their rights as they consider long-term solutions for their financial situations.

The Federal Trade Commission (FTC) enforces the provisions of the Fair Debt Collection Practices Act (FDCPA), which governs what debt collectors or collection agencies are legally authorized to do in the course of collecting debts. Credit card debts, medical bills, home mortgages and auto loans are among the type of debts.

Actions Prohibited by Debt Collectors Under the Law

Under the FDCPA, third-party debt collectors may not:

  • Use abusive or obscene language
  • Call repeatedly and harass a debtor
  • Call before 8 a.m. or after 9 p.m. unless the debtor agrees
  • Call a debtor at work after the debtor has asked the collector not to do so
  • Speak with anyone about the debt other than the debtor and the debtor's attorney
  • Lie about the amount the debtor owes
  • Pretend to be a representative of a credit bureau or an attorney
  • Misrepresent the documents they send to a debtor as being legal papers
  • Threaten to sue or garnish wages unless actually intending to do so
  • Threaten the debtor with arrest for not paying
  • Use unfair practices such as charging interest or fees not explicitly allowed in the contract creating the debt

If a debtor can show that a debt collector violated any of the provisions of the FDCPA, he or she may sue the debt collector for any losses he or she suffers, such as lost wages or medical bills resulting from the collector's actions, as well as attorney fees and court costs.

Tips for Dealing with Debt Collectors

There are some techniques that debtors can employ to reduce the problems they encounter with debt collectors. They can:

  • Request a copy of the amount of the debt and the source of the debt in writing
  • Dispute the debt in writing sent by certified mail within 30 days of receiving the written record of the debt from the collector if the debtor does not agree that the collection company's records are accurate
  • Keep notes from phone conversations, voicemail messages and letters from collectors
  • Say as little as possible to the collector during phone calls; stick only to facts of the debt
  • Negotiate with the collector if possible to pay less than the actual amount owed and then get any agreements in writing before paying

One Phoenix creditor harassment lawyer says that debt collectors can be intimidating and are an unneeded distraction for those struggling to get out of a financial hole. However, there are options available to debtors. Filing for bankruptcy protection stops creditor harassment immediately. Interested individuals are encouraged to speak with a bankruptcy attorney to find out more.

Source: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm