Unless you’re portraying someone indebted to Mafia loan sharks in a movie, no creditor is going to break your legs for money owed. That said, they do have the right to demand payment — which can sometimes take the form of incessant reminders.
You already know that you’re behind on your obligation; are constant phone calls really necessary? Just how far can collection agencies go before their tactics become illegal?
Not all Collectors are Created Equal
When a creditor has exhausted in-house efforts to collect a debt, it may hire a collection agency to do the job. While many ethical collections firms exist, there are some less-than-reputable debt collectors who use techniques that border on harassment.
Recoverity, a marketplace that matches creditors with reputable debt collectors, is trying to change this dynamic and bring transparency to a dark-sided industry. “Businesses must stop engaging unethical, fly-by-night collectors,” says co-founder Miguel Leman. “Harassing consumers is an ineffective way to recover funds and it puts the reputation of both the collector and the business trying to recover money on the line.”
Know Your Rights as a Debtor
Unfortunately, people forget their rights because of guilt or shame about the financial situation they’re in. Instead of suffering the ruthless tactics of collectors, folks should educate themselves on what is and is not appropriate behavior among collectors.
“The Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA) are the most granular sources of information on the regulations surrounding the collections industry,” says Leman. In short, they prohibit debt collectors from harassing or threatening debtors, making false statements about them, or invading their privacy.
“There is no excuse for debt collector abuse,” says consumer advocate Alexis Moore, who has served as a credit collections expert in over a thousand cases in state and federal courts. Moore herself was a victim of harassment after experiencing identity theft and is all too aware of the abusive behavior of some debt collection agencies.
It’s important for debtors to know that collectors may not:
- Put you in jail or threaten to jail you for not paying your credit card bill
- Call you hour after hour (or before 8 a.m. or after 9 p.m.)
- Contact your family, friends, or any third party about the money you owe
- Call your work or home if you ask them, in writing, to stop
- Collect on a debt you dispute until they can provide proof that you owe it
In Moore’s case, collectors were harassing her for debts she had not incurred, debts that had resulted from her identity being stolen. If you find yourself in a similar situation, there are steps you can take:
Fight Invalid Claims
“Under the FDCPA, a consumer has the right to dispute any debt that is sent to collections,” says Kevin Gallegos, vice president of debt negotiation/settlement firm Freedom Financial Network. “If you dispute the debt, and the agency is unable to prove that you owe it, then the agency is legally required to stop trying to collect.”
Put it in Writing
Disputes — a.k.a. debt verification or validation — must be handled in writing. “The FDCPA requires debt collectors to notify you of your right to validate the debt,” explains Gallegos. “You must write to request verification within 30 days of being informed of the debt.”
Take Control of Calls and Notices
Gallegos advises consumers to file a complaint with the Attorney General’s office and the Federal Trade Commission. “If you notify the collection agency in writing to stop calling, the agency is required by the FDCPA to honor that request.”
The Consumer Financial Protection Bureau can also help. This federal organization stands up for consumer rights. “If talking with the collector and creditor directly doesn’t work,” says Leman, “it’s time to bring in the big dog.”
Arrange Payments for Debts You Owe
Once a creditor turns a debt over to a collections agency, that agency will use the tools at its disposal to ask for payment. Stopping the calls will not eliminate a valid debt, but it can be useful as you try to come up with a way to resolve an account. Most creditors will work with you to arrange a payment plan that is conducive to you and your situation. And sometimes, you can negotiate to settle for less than the full amount you owe.
Hire an Attorney
When you have exhausted your options and still feel that you’re being harassed, you may elect to hire an attorney to file suit against the offending debt collector. “When dealing with underhanded people,” says Leman, “lawyering up is a good option.”
Every case that Moore has consulted on has been settled with six figures or higher. “This is proof that wronged consumer can and shall prevail!”
End Debt Collector Harassment Once and for All
With this information, you should be able to determine whether what you’re experiencing is, in fact, debt collector harassment. Yes, creditors have the right to demand payment — but they do not have the right to harass you. Follow the actions above and end debt collector harassment for good.