Making Payments to Collection Agencies

So you are in a financial slump.  With the current state of the economy, many people are there now too.  Just when you thought that things couldn’t get any worse, debt collectors begin calling and harassing you on the phone. Who are these callers and how did they find you? 

If a debt collector is contacting you, it usually means your account is in default, has been written off the books as a loss, and has been sold to a collection agency.  Debt collectors make their money by purchasing your debt for a percentage of what it’s worth, and then try to squeeze as much money out of you as possible in order to make a profit. They often do this by harassing the person that has defaulted on their credit card or bank loan.  You may not realize it, and they will probably not tell you, but debt collectors are governed by the rules outlined by the Federal Trade Commission in the Fair Debt Collection Practices Act (FDCPA).  So, what should you do next? 

Take Action 

• Talk to the collector and find out if the debt is really yours, how much you owe, and to whom.
• Document all interactions you have with the agency.
• Get the name of the person who is calling you, what agency they work for, their address, and phone number.
• Ask the collector for a verification letter to determine if the debt is really yours.
• If you want them to stop calling you, send the agency a certified letter asking them to stop and to contact you in writing only.
• If you determine that the debt is really yours, try to negotiate with the agency an amount that you can realistically afford to pay each month in order to get rid of the debt as quickly as possible.

   

• Because collection agencies purchase your debt for pennies on the dollar, they are often willing to negotiate for a percentage of the original debt that you owed.  Make sure if you agree to anything with the debt collector that they send it to you in writing.

   



What Can The Collection Agency Do? 

• The collection agency must send you a “Validation Letter” explaining what you owe and to whom within five days of contacting you.
• if you have hired an attorney, the collection agency should only be communicating with your attorney and not you.
• They can sue you for the debt that is owed and then garnish your wages if they win the lawsuit against you.

   

What Is The Collection Agency Prohibited From Doing? 

• The debt collectors do not have “carte blanche” to contact you whenever and wherever they want.  They are not supposed to contact you before 8 in the morning or after 9 at night. 
• If they are bothering you at work, you can tell them either orally or in writing that you are not to be contacted there.
• The collection agency cannot discuss with anyone except you, your spouse, or your attorney any information about your debt.
• They cannot harass or threaten you.
• They cannot make any false statements about you to anyone about your debt or to you
• They cannot make any false statements about who they are.
• Collectors may not engage in any unfair practices such as trying to collect extra fees or taking money out of your account without authorization.

   

For more specific information about what collection agencies can and cannot do, visit the Federal Trade Commission at www.ftc.gov/credit.  If you believe that a collection agency has violated your rights and the law, contact your state’s Attorney General’s Office or the Federal Trade Commission at www.ftc.gov. 

Comments

Be the first to comment on this article.