Is the debt collector harassing you for payments? If yes, you aren’t alone facing this issue. Sometimes the tactics of debt collectors are annoying, worst, and even illegal. So, in this scenario, you must understand fraud and the difference between legal and illegal tactics. This way, it will be a lot smoother for you to handle the collectors.
How to deal with debt collection agencies?
If your creditor has contacted the debt collection agencies, ensure they have the authority to deal with the debt. According to the guidelines of the Collection and Debt settlement services act: A debt collector is required to send you an email that includes the following information:
- Name of the creditor
- The total amount that you owe to the creditor
- Name of the debt collection agency and proof whether they are eligible for collection
However, the agency must wait six days before taking further action after sending the notice. But if you can’t pay the debt, contact the collection agency, and negotiate repayment terms. If you are dealing, don’t forget to keep a record of everything in written form.
Steps to deal with the debt collection agency:
While applying for a loan, don’t get into any contract you can’t fulfill. Still, if you are in stormy waters and a creditor has contacted a debt collector, then here are the tips for dealing with them:
- If a collection agency contacts you, don’t rush payment; consider your options. For instance, if you owe $50,000 or $100,000, then if you can pay part of it, that still works towards their quota.
- Don’t provide any information that creditors or debt collection agencies can use later.
- If your creditor has sold the debt to a third party, it’s time to gather facts again. In most cases, people complain that traded debt has errors, and the record shows the wrong amount owed. So, in this case, request a validation letter from a collection agency and gather your loan records.
Above all, you should be aware that as a consumer, you have rights that protect you from fraud. For instance, you have the right to open communication, the collection agency can’t mislead you, and you have the right to open a dispute.
Do’s & Don’ts of collection agencies:
Earlier, we discussed that creditors use collection agencies to collect loans on their behalf. These agencies buy loans at discounted prices and keep the entire amount after recovering from the consumer. But during this process, they adopt many tactics that are illegal or prohibited by law.
Don’ts/illegals tactics of collection agencies:
The federal government has an act that protects the rights of consumers. There are several restrictions on the behaviors of debt collection agencies. However, here are the rules they are restricted by law. For instance, they can’t contact you if:
- If you send them a letter, you will start a dispute against the debt and take this matter to court.
- Moreover, the agency must contact the lawyer for payment if your lawyer sends them a registered letter containing their contact information.
- If you are not the same, they are searching for and have already informed them about this matter.
Apart from this, there are other conditions where a debt collection agency can’t contact you. If they do this, then it will be deemed as illegal activity:
- They can’t reach you on Sunday except between 1 PM-5 PM
- The debt collection agency can’t contact any other day of the week between 9 PM-7 AM
- Law prohibits threatening and coercive language using mail, text, phone, or person.
- Moreover, the collection agency can’t reach you on the Saturday holiday
- It’s illegal to tell false or misleading information
- If they say they have started court action when they haven’t
- If they add extra money to the total due amount by adding a fee
Apart from this, the collection agency can’t reach out if you have gone bankrupt and have already informed them about this fact.
Legal activities of debt collection agency:
The debt settlement services act regulates what a debt collection agency can do. Sometimes, collection agencies can be very persistent, so it’s vital to stop their behavior. So, the law collection agency must send you a written notice that contains the following information:
|Name of the creditor for which you owe money||The total amount that you owe to the creditors|
|Name and detail of the collection agency||Proof of the authority to demand payment|
Moreover, after sending a notice, the agency must wait up to six days before contacting you again. The collection agency can use paystubs to track your monthly or annual income.
Banned debt collectors:
You must know your rights, this way; you can deal with the problems. Money management is vital even working on a remote work model. The issue of the debt collection agencies has gotten so bad that FTC prepared a list of banned collection agencies. So, to protect consumer rights, FTC prepared a list of prohibited collection agencies. The authority filed a lawsuit against 180 debt collectors, banned 63 of them, and won $220 million in judgment. You can visit this official link to see a list of banned debt collection agencies. Always believe that FTC is your ally and gives you rights even if you are in the vicious circle of debt. For instance, debt collectors must deal with honesty, and you have the right to open a dispute. If you open a conflict within the first 30 days, the collection agency can’t contact you unless the dispute is resolved.