Many times the tactics used by debt collectors can be considered harassment, but few debtors are aware of the rules or how they can respond to illegal debt collection practices.
Collection agencies make their money by purchasing debt for pennies on the dollar and attempting to collect the full amount from the borrower plus as many fees they can tack on and get away with. The problem of “collector abuse” became so prevalent that Congress was obliged to pass the Fair Debt Collection Act (FDCA) in the early 1970s. This act made certain practices by debt collection agencies illegal, like attempting to make contact with the debtor after 9 PM local time or communicating details of the debtor’s debts to third parties with no need to know such personal information.
To prevent fraudulent, unfair, or illegal debt collection activities, take the following steps:
–Be suspicious. The debt collector is not a doctor, lawyer, or a priest. No confidentiality exists with a debt collector. Be cautious of clever word play on the part of the debt collector to put words in your mouth. Never give out personal financial information (like bank account numbers) to a debt collector over the phone.
–Demand everything in writing. Notice that this is not a request, it is a demand. Under the laws of the FDCA, a collector is required to provide certain information to the debtor in writing, but only when requested. Some information that collectors won’t generally volunteer until asked is verification of the debt and justification to collect the debt.
–Don’t ignore the problem. Debt is a very real problem that doesn’t go away when ignored. Not only does ignoring the debt allow it to grow, but it also allows collectors to more easily damage credit scores, garnish wages, etc. Ignoring the problem can also diminish the rights of the debtor. For example, the collector can’t be compelled to provide verification of a debt unless request for verification is made within 30 days of the debtor being advised by the collector of their right to dispute the amount of the debt. The notice of the right to dispute a claim by a collector must be presented to the debtor within 5 days of initial contact.
–Don’t fall victim to pressure tactics. Pressure is what collection agencies deal in. If they weren’t good at applying pressure, they wouldn’t be able to collect, and therefore wouldn’t be in business. Use the required waiting periods to your advantage by consulting with lawyers and researching credit laws. Consumers will find that it is much harder to apply pressure to an educated debtor than one who has chosen to remain unknowing of the law.
Remember that debt collection agencies are private businesses that accept financial losses as a risk of doing business. While every attempt should be made by a debtor to clear their debts, nothing allows a collector to break the law and resort to harassment or abuse in order to mitigate losses to their own business. If a debt collector is unable to earn a profit by obeying the law, then that debt collector has no reason to remain in business.