Debt collectors are highly motivated to convince debtors to pay the debt because they frequently work on a low base pay plus commission. This business model has created the reputation for bill collection agencies that we know today.
The collector might engage in threatening behavior and harassment. However, like any other business they are governed by laws that prohibit certain abusive practices.
There are three reasons for a debt collector to contact you: your creditor has not received a payment from you within the time frame discussed in the contract; you are a victim of an identity theft meaning someone used your identity to obtain credit and didn't pay it off; and finally, you might be contacted by collectors who are looking for someone other than you .
When contacted by a collector, take as much information as possible from the caller. Ask for the name of the company, address, the caller name, fax and phone number, amount owned, and the name of the creditor who passed your account to them. Also, tell them you expect to receive a notice in the mail concerning this debt. The last step is very important because you need to have proof of the debt in question in writing.
If you discovered that the debt is not yours, never pay it off simply to get rid of the collector. Also, never ignore the collector either. They will not stop contacting you, and may even file a lawsuit against you. If you are repeatedly being contacted by a collector looking for someone other than you, it may be considered a form of harassment. To stop this you need to send them a letter requesting to cease calls.
If you established that the debt is yours and you don't feel comfortable dealing with a collector via phone, tell them you want all future correspondence in writing. You need to send this request via a certified mail and request a return receipt. If you want to allow calls only between 5pm and 6pm, tell them about it in the letter. By law collection companies are required to respect your privacy and will have to cease all phone calls to your home, relatives, neighbors, and work.
Once you have their claims in writing it's easier to seek legal help, and keep records of your correspondence. Send all your responses to bill collectors via Certified Mail. This way you will have proof of receipt by the addressee.
Remember that the amount they claim you owe is negotiable. You can negotiate the total amount due, number of payments, and the payment deadline. Once you worked out the payment plan, request it in writing.
What a debt collector CANNOT do:
1.) Use deceptive practices. For example, threaten you with arrest or trick you into paying for collection calls.
2.) Use obscene language.
3.) Call you at work after you tell them that your boss does not approve these calls.
4.) Deny you the right to receive a written notice (within five days after your first phone conversation) that would tell you how much you owe and the name of the creditor that says you owe the money. If you do not receive the notice within five days, call the collection agency and ask for its address and fax number. Then, send a letter to the collector noting its failure to send you the required notice. As a minimum, make a note in your file.
5.) Refuse to give its name and the name of the collection company when asked.
6.) Put a debt on your credit report if you file a dispute. It must validate the debt by obtaining a verification of the debt or a copy of a judgment from the creditor before continuing their collection efforts. The results of the investigation must be mailed to you.
SAMPLE CEASE AND DESIST LETTER
The cease and desist letter has legal stature based upon the Fair Debt Collections Practices Act at section 805. You can read it for yourself here. The Fair Debt Collection Practices Act applies to both the agency and to attorneys who collect two or more debts per year. This law does not apply to the original creditor. However many original creditors will honor your request to not be called.
Please note that when a consumer debt collector receives a cease and desist letter they may move the account to legal status. This means that if they intend to sue you, the cease and desist letter will prompt them to bring suit immediately. So if there is an alternative way to stop being bothered by their calls, like using an answering machine, I'd suggest that you try it first. If there is no alternative then send the cease and desist letter.
Send the letter via certified mail with a return receipt request. Keep a copy of the letter for your files. The letter may take a couple of weeks to work its way through the collection agency's system before your number is taken out of their automated dialers. Even after they receive the letter they are allowed (under law) to contact you one time to notify you of their intent.
The below letter is easily personalized by utilizing a word document program. Although not the cease and desist letter currently utilized by Credit Restoration Consultants, it will serve to notify consumer debt collectors of your intent and purpose. Although protected by copyright, single user permission is granted to individuals in the self help credit restoration process.
My City State and Zip
December 30, 2001
Acme Collection Agency
12345 West Main Street
Any Town, AL 30311
This letter is forwarded to your collection agency reference account number 123456 and the dunning collection notices/calls recently received. Insofar as your agency is a debt collector pursuant to section 803 of the Fair Debt Collection Practices Act, you will be treated like one. Therefore, the Fair Debt Collection Practices Act - and all of its relevant provisions - will be invoked.
YOU ARE HEREBY NOTIFIED that this is a disputed debt pursuant to section 809 of the Fair Debt Collection Practices Act. The specific content of said dispute was recently stated - verbally - to an individual at your agency who refused to provide their name upon request thereof. Pursuant to the FDCPA, you are prohibited from dunning a debtor when a specific debt is disputed.
YOU ARE FURTHER NOTIFIED that this is a disputed debt pursuant to section 623 of the Fair Credit Reporting Act. It is my belief that your agency has illegally reported this disputed debt to Equifax, Experian, and Trans Union. If this is the case, I will most certainly litigate an action against your agency insofar as it has willfully reported a disputed debt. Pursuant to the FCRA, your agency must notify the consumer reporting agencies of any disputed delinquency immediately upon notification thereof. A further cause of action may exist for failure to perform this ministerial task.
YOU ARE FURTHER NOTIFIED that I desire no further communication with your agency under section 805 of the Fair Debt Collection Practices Act. Your agency is to CEASE and DESIST all further communication immediately. Should I receive another piece of dunning correspondence that does not comport with the provisions of the FDCPA, I will immediately initiate litigation against your agency.
John Q. Public
THIS IS AN ATTEMPT TO MAKE A DEBT COLLECTOR OBEY THE LAW. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. THIS COMMUNICATION IS FROM AN ALLEGED DEBTOR REFERENCE A DISPUTED DEBT.