4 Rights You Have Against Debt Collectors

Photo by Peter Macdiarmid/Getty Images

Photo by Peter Macdiarmid/Getty Images

They’ll call you at work, call you at home, and on your cell phone. They may even text you or call your loved ones — debt collectors can be relentless. Their job being to settle or negotiate payments for an overdue or delinquent account, they’ll try various tactics to get you to pay up.

A few years ago, roughly one-in-four (26 percent) of Americans admitted they did not pay their bills on time, and another 34 million consumers reported making late credit card payments, according to a survey published on Credit.com. A large portion of us have spoken to a debt collector at one time or another.

These debt pros will not only call about credit card bills and past due utilities, you may also hear from a collector about a student loan debt, hospital bills, telephone bills, or other type of credit accounts.

A call from one of these collectors can be intimidating. They are trained on exactly what to say, how to say it, and how to make you feel as though you have to pay or you will get you into trouble.

A Kiplinger publication included a personal account from an actual debt collector. The debt collector (or should we say past debt collector) explained various collection methods, such as good cop bad cop, yelling, and other scare tactics that some debt collectors use in efforts to get a consumers to pay. What’s the collector’s incentive? Well, in addition to the collection agency earning big bucks, debt collectors often receive bonuses and commissions (in some cases, four or five figure checks) when they gets consumers to shell out cash for their delinquent accounts.

The FTC receives more complaints about the debt collection industry than any other. The Fair Debt Collection Practices Act (FDCPA) “which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you,” is your primary form of protection when dealing with these collectors. Here is a list of some of your rights.

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1. Lying and cheating to collect

Some debt collectors are honest professionals who make an honest living. There are, however, a few really bad eggs out there, who use unethical practices to collect debts. The FTC just issued a press release about a Buffalo, New York-based company that used fraudulent debt collection strategies. The company’s assets are frozen and it is currently pending trial.

The crime? Allegedly, the Buffalo company would call consumers and threaten to call the police and obtain a warrant for their arrest unless they paid over the phone immediately. Other consumers asserted that the Buffalo collection business revealed personal information to friends and family members, added fraudulent transaction fees, and even attempted to collect debts that were already discharged during bankruptcy.

“In a joint complaint, the FTC and New York Attorney General charged the operation with using lies and threats against consumers in violation of federal and state law. The defendants misrepresented that consumers had committed check fraud or another criminal act; falsely threatened to arrest or imprison consumers, sue them, garnish their wages, or put a lien on their property; failed to back up their claims that consumers owed the debt; charged illegal fees; and improperly revealed consumers’ debts to third parties,” reads the release. 

Collectors are not allowed to lie to you, tack on fees unjustly, harass you, threaten you with violence, threaten any legal trouble they cannot actually bring, or spread false information about you to anyone (including credit bureaus). They also cannot threaten to arrest you for anything, because of course, there is no debtor’s prison.

Source: Thinkstock

Source: Thinkstock

2. Calling day and night?

Although some debt collectors may take the liberty of calling all day, every day. They’re not supposed to call you during times that are inconvenient for you, like at 7 a.m. in the morning or after 10 pm at night, for instance.

If you have collectors calling you at work, and you ask them to stop, your rights under the FDCPA say they have to stop calling if you tell them such calls are not permitted at your workplace.

The law states, “Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication…[or] at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.”

If the collector calls anyone else about your debt, like a family member or friend of your’s, they should only be calling to find out information like your phone number or place of employment. They should never disclose any info about any money you owe to anyone, and they should not repeatedly call any of your friends or family members.

Source: Thinkstock

Source: Thinkstock

3. Prove it

Within five days of contacting you, debt collectors generally have to send you written information explaining the debt, who you owe it to, how much you owe, and what to do if you don’t believe you actually owe it.

If you don’t believe you owe the supposed debt, you have thirty days to send a letter asking for verification. This means the collector has to send further proof that you owe this money and in the meantime, until they provide such proof, they are not permitted to contact you.

Source: Thinkstock

Source: Thinkstock

4. Garnishment

Although you do have rights to protect you from unfair debt collecting, it’s usually a good idea to work out some way to pay your debts. If you don’t pay what you owe, the creditor or debt collector can sue you. If they win, the end result may be a wage garnishment.

Your wages from an employer can be garnished for failure to pay a debt, when the collectors say this, they may just be telling the truth. They cannot however garnish, social security or SSI benefits, veteran’s benefits, civil service and federal retirement and disability benefits, military annuities and survivors’ benefits, or federal emergency management agency federal disaster assistance.

Source: Thinkstock

Source: Thinkstock

What to do if you think your rights have been violated

If a debt collector violates your rights under the FDCPA, it’s a good idea to file a formal complaint because chance’s are if it’s happening to you, it’s more than likely happening to other consumers as well.

According to the FTC website, you should direct complaints towards your state attorney general’s office, the FTC, and the Consumer Financial Protection Bureau.

The FTC site also adds, “You have the right to sue a collector in a state or federal court within one year from the date the law was violated…the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.

(Disclaimer: This article is for informational purposes only and should not be construed as legal advice of any sort.)

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