If you’ve fallen behind on a payment to one of your creditors you probably have been receiving letters or notices demanding payment that have become increasingly strident. If you fail to pay the creditor even after you’ve received these letters it will likely sell your debt to a debt collection agency. When this is the case you can bet it won’t be long before you start receiving phone calls from a debt collector.
Some debt collectors start out being really friendly. Others are insulting and aggressive from the get go. Regardless of which type you get the collector’s goal will be to make you cry or feel so guilty about owing the money that you will agree to pay your debt – regardless of whether this is a wise financial move or not.
Why a debt collector is so mean
Debt collectors are mean and pushy because most are paid on a percentage basis. This means the less they collect the less they earn. Other collectors are paid based on the number of calls they make or the number of letters they send out. This is yet another way they are incentivized to be persistent, pushy or even worse.
He’ll give you false sense of urgency
Debt collectors have learned that the longer your debt goes unpaid the less likely it is that they will collect from you. This is what motivates them to start out tough and to create a false sense of urgency. For example, when they talk to you they may try to get you to commit to paying your debt by a specific deadline or according to a very short timetable. If you fail to give into their demands they may threaten you with a lawsuit, to garnish your wages or even jail time – regardless of whether any of these things are likely to happen or even legal.
Understnad that knowledge is power
The old saying that knowledge is power is definitely true when dealing with a debt collector. In 1996 our Congress passed the Fair Debt Collection Practices Act (FDCPA). This sets out what debt collectors can and cannot do. For example, they must not call you before 8 AM and after 9 PM your local time. They are not allowed to use misrepresentation or deceit to collect a debt such as threatening to send you to jail or garnish your wages. They are not allowed to try to collect an unjustified amount of money and cannot contact your friends or relatives except for your wife.
The FDCPA also bars debt collectors from calling you over and over during a short period of time and getting in touch with your employer about your debt unless it’s past-due child support. Debt collectors are also barred from calling you on a Sunday, swearing or insulting you or threatening you with jail time. They cannot order you to accept collect calls from them or to deposit a post-dated check you have given the collector before the date on the check.
What the debt collector must do
When a debt collector first contacts you he must give you the name and address of your original creditor and notify you that it’s a debt collector that’s calling. Most importantly, he must verify your debt. What this means is that if within 30 days of receiving that first call you dispute the debt or request that it be verified the debt collector must either mail you the requested verification information or stop trying to collect from you altogether.
Cease and desist
In the event the debt collector chooses to harass you – despite the FDCPA – you can send the agency what’s called a cease and desist letter. If you choose to do this, it’s important to send the letter registered and return receipt requested so that if necessary you can prove that the agency received it. When it does get your letter it has only two choices. It can contact you to say that it won’t be contacting you again or it tell you what specific action it will be taking next such as filing suit against you.
Know your legal rights
If you believe a debt collector has violated the FDCPA you can file a private lawsuit in a federal court to collect damages up to $1000, plus reasonable attorney’s fees. If you lose your lawsuit and the court feels that you filed the case in bad faith and to harass the debt collection agency then the court may award the debt collector its attorney’s fees.
As an alternative to filing suit, you could file a complaint with the Consumer Financial Protection Bureau, which is now charged with enforcing the FDCPA and with your state’s Attorney General’s office. Neither of these will get you any money but this will at least put pressure on the debt collection agency to stop disregarding the FDCPA going forward.