Dealing With Debt Collectors
Whether or not you have personally had the unpleasant experience of being contacted by a debt collector, you undoubtedly have heard about some of their notoriously unethical tactics. By learning the laws that restrict the actions of debt collectors, you can prevent yourself from falling victim to their misconduct. You also need to know your rights and how you can stop the actions of a debt collector.
First of all, the Fair Debt Collection Practices Act (FDCPA) defines debt collectors as a person or business (including lawyers) whose principal purpose is the collection of debts. This means that the rules of the act do not apply to the original holder of a debt. In other words, the in-house collection department of the business you borrowed from is not necessarily required to follow these laws. Also, only personal debt is covered by the act, not debts incurred to run a business.
The following are the FDCPA’s rulings for a few common abuses committed by collection agencies:
- They cannot contact you at inconvenient times unless you agree to it. The FDCPA defines inconvenient times as before 8 a.m. or after 9 p.m.
- They cannot call you at work after they have been told that it is not acceptable.
- They cannot call repeatedly, ring your phone continuously or call without identifying themselves.
- They cannot contact you after receiving a notice in writing from you with a request that they cease and desist all contacts or that you refuse to pay the debt.
- They must stop all communications with you once they have been notified that you have an attorney representing you in the case.
- They may contact a third party (family, friends, neighbors, etc.) only for the purpose of locating you and, in most cases, only one time.
- They cannot discuss your debt with anyone other than you, your spouse, or your attorney.
- They cannot falsely imply that nonpayment would result in arrest, the seizure of property or garnishment of wages.
- They cannot falsely claim that you have committed a crime.
- They cannot deposit a post-dated check before the date on the check.
- They cannot engage in harassing, oppressive or abusive conduct or use obscene or profane language.
Within five days of first contacting you, the collector must send you a “validation notice” in writing stating how much money you owe, the name of the creditor and how to proceed if you don’t think you owe the money. Once you receive the validation notice, you have thirty days to send them a letter disputing the debt.
The Fair Debt Collection Practices Act was enacted by congress to protect us from abuse by collectors. The full text of this act is very lengthy and quite confusing. I have attempted to explain the basics of it, but if anything is not clear the entire act can be found at the site of Cornell University Law School . If you believe that a debt collector has violated any of these rules, you can contact your state Attorney General’s office (www.naag.org) or the Federal Trade Commission (www.ftc.gov).
Great information! I didn’t know that the original holder of the loan does not have to follow the same rules as the “acutal” debt collectors. I had a co-worker whom must not have known about the rules because her cubicle was right next to mine and her phone was rining all day and she refused to answer it because it was the collectors. She should have checked her rights.
I have a similar situation. I had a $300 hospital bill that went to a third party collecter, and then went to another collector that says they are a Law Office. They sent us what looks to be a court summons so the next day I went and got a post dated check and paid the hospital. I then got a letter from the Law Office saying that eventhough I paid the hospital I owe them 350 dollars for legal fees occured since they have already filled for a summon/law suite even though I paid the bill in full to the hospital and that if I don’t pay the $350 they will continue with the law suit. Can they do that or are they just tring to get me to pay them money?
If the hospital sold my account to the other 3rd party creditors can they still accept my payment or would they of had to deny me when I paid it off?
So I guess I really want to know if I can be sued for court fees if I have paid off the debt?
We always advise people to address their financial problems before things get to the stage of debt collection. This isn’t always possible in which case it’s important to really know your rights.
The FDCPA is a great tool and we educate all of our clients about the parts that pertain to debt collectors. Although the law is quite outdated and I am looking forward to an updated version.
One of the things that I would like to see changed is forbidding debt collectors from contacting neighbors and relatives. Currently they are allowed to do that in order to locate a debtor however, it is very common for a collector to do it when they know full well they have the correct contact information for a debtor and they are just trying to scare and harass them by calling a neighbor.
Of course they aren’t legally allowed to say what the call is about, but it doesn’t take a genius to figure out it is a debt collector trying to find your neighbor.
The FDCPA is a very powerful tool, and any family that is struggling financially, should spend an hour or so and learn their rights so it will be very unlikely a creditor can intimidate them into doing something that they shouldn’t be doing.
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