9 Things You Should (And Shouldn’t) Say to a Debt Collector
The Fair Debt Collections Practices Act helps protect you from predatory debt collectors when you’ve missed a bill payment. Knowing what and what not to say is a good way to preserve your rights.
Remember, whether threatening or cajoling, a debt collector is basically an interrogator who wants you to cough up information to be used against you.
Be smart and follow these guidelines:
1. Do — Ask to see the collector’s credentials
You want to verify that this isn’t some scammer or fly-by-night company. You can also check with the BBB or the state’s attorney general to verify the collector’s license.
2. Don’t — Volunteer information
Rather, say as little as possible. When you do answer a direct question, give an honest answer but not an expansive one. You might sound like a broken record, but that’s OK.
3. Do — Make a preemptive offer
The collector wants to see how much you can pay. If you offer 10 or 15 percent from the start, you might be able to negotiate a final number in the 30 to 50 percent range. Show a little money and flexibility upfront so the agency doesn’t feel it has to sue you.
4. Don’t — Make your bank account accessible
The collector may ask you to give access to your bank account. Simply refuse — it’s your right to do so.
5. Maybe — Ask for a payment-for-deletion deal
In this kind of deal, you agree to a payment in exchange for the creditor deleting the collection account from your credit report. Like all agreements with the collector, get it in writing first and only then make the payment.
There’s one big caveat to this — the collection agency may “settle” with you for an arbitrary figure, like 85 percent of your original debt owed. While this looks good on paper, there’s a possibility they could send the remaining 15 percent to another debt collection company that will try and collect it from you, starting the process all over again.
However, if the debt’s age is near the statute of limitations, don’t volunteer any money or even acknowledgment of the debt — the state’s collection clock might run out on the debt.
6. Do — Explain your predicament
If there is a legitimate reason for missing a bill payment, don’t be afraid to explain it repeatedly and forcefully. Show any evidence that supports your claims and stick to your guns.
If you think the collector is using incorrect information, ask for proof of how the debt was calculated and question any fees, which may not be permitted in your state.
7. Don’t — Provide ammunition
It would be a mistake to tell a bill collector that you spent the payment money on gambling, travel or some other non-essential reason. Make it clear that you know your responsibilities but that you encountered an unanticipated situation.
8. Do — Control your emotions
Do not panic or feel ashamed, intimidated or powerless. This is just what the debt collector wants and hopes it will cause you to blurt out some damaging information.
Think of it as a business negotiation and handle yourself accordingly. Don’t give in to a collector who threatens a lawsuit (in fact, point out how expensive and time-consuming that will be and that the agency will lose its commission.).
9. Maybe — Go over a collector’s head
If you feel the collector is acting unprofessionally or abusively, refuse to deal with the collector and ask to speak to a supervisor instead. You may be able to sue the collector for unlawful actions.
Just keep in mind that senior staff at a debt collection firm will likely be more experienced and able to coax additional payments out of you. If things get bad, simply refuse to talk to the collection agency and speak to an attorney instead.
If you’re having trouble managing your debts, a qualified debt relief firm may be able to help.
Image credits: consumerreports.org