Tricks Debt Collectors and Collection Agencies Use – Know Your Rights

by Hank Coleman

Debt Collectors are not your friends.  Dave Ramsey calls them the scum of the Earth.  The people who work for collection agencies and credit card companies will stop at nothing to get the money their company says that you owe them whether you really do or not.  They are paid bonuses and promoted based on how much money they collect from you.  Debt collection agencies buy bad debt from companies around the country for pennies on the dollar, and their ruthless phone callers keep up to 50% of the money they collect as their bonuses.

Collection company workers use every dirty trick in the book in order to get the money that they are owed.  They will berate you, challenge your manhood, shame you, question your beliefs and feelings, dispute your faith, etc.  They keep a detailed record of everything that you say and every excuse that you make.  If you make reference about your church or your religion, for example, they will quote you scripture the next time they call about how it is sinful not to pay your debts. 

The people calling you from the comfort of their cubicle will hide their identity from you as long as possible.  They will call and ask for you by your first name like you are their long lost friend from high school.  They will say that they need to update or verify your information and then ask you for everybody and their brother’s home , work, and cell phone numbers so that they can harass you late and squeal on you to your landlords and bosses.  Collection agents may also pose as paralegals or fraud investigators initially in order to keep you on the phone. 

There are a few things that you should know and keep in mind to help you battle these callous collection agents.  Consumers are protected by the Fair Debt Collection Practices Act.  You can find a complete listing of the act’s protections on the Federal Trade Commission’s websiteBut, here are a few of the highlights of the act…

  1. Once a debt collector receives written notice from a consumer that he or she refuses to pay the debt or wants the collector to stop further collection efforts, the debt collector must cease any further communication with the consumer.
  2. A debt collector may not engage in repeated personal contacts with a consumer with such frequency as to harass him (multiple phone calls repeatedly).
  3. Collectors cannot imply a threat, and they cannot use abusive language.
  4. Debt collectors are prohibited from “shaming” a customer into payment, by publicizing the debt.
  5. An individual debt collector must disclose his employer’s identity, when discussing the debt on the telephone with consumers and must not misrepresent his employer’s name during the conversation.
  6. A debt collector may not call the consumer at any time, or on any particular day, if he has credible information (from the consumer or elsewhere) that it is inconvenient.
  7. If a debt collector learns that a consumer is represented by an attorney in connection with the debt, the debt collector must contact only the attorney and must not contact the consumer.
  8. A debt collector may not call the consumer at work if he has reason to know the employer forbids such communication
  9. A debt collector may discuss the debt only with the parties specified by the consumer.  For example, unless the consumer has authorized the communication, a collector may not discuss the debt (such as a dishonored check) with a bank, or make a report on a consumer to a non-profit counseling service.
  10.  A debt collector may not make a misleading statement of law, falsely implying that the consumer has committed a crime, or mischaracterize what constitutes an offense by misstating or omitting significant elements of the offense.

While not paying your bills is bad and unethical, it is not a criminal offense.  It is a civil law violation.  It is illegal for a collection agency or their agent to threaten to pursue the prosecution of you criminally.  The United States does not have a debtors’ prison.  

What To Do.  Do not trust debt collectors.  They will give you financial advice that will make the most inexperienced investor cringe like draining your retirement accounts or taking out a second mortgage to pay off your credit card debts.  Also, do not allow creditors electronic access to your bank accounts.  Do not provide them with a post dated check.  They will wipe out your bank account despite promises to only withdraw the amount you establish in a payment plan.  If you did not get anything agreed to in writing, then it did not happen.  Is that legal?  No.  Will they do it and then call you a liar when you call them on it?  You better believe it.  Whenever you settle a debt with a collector, make them send you the agreement in writing with the account number listed and a statement stating that your payment is makes your account “paid in full”.  Write these things on any checks that you send to the collection agency or credit card company to prove later that it was used for the settlement of the debt.

Knowing these things can help you immensely when dealing with debt collectors.

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