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Dealing with Collectors

Know Your Rights
If you have an outstanding debt that has been turned over to a collection agency, you may face a barrage of annoying calls or letters in attempt to collect on the debt. Most debtors don't realize that they have very specific rights under the Fair Debt Collection Practices Act (FDCPA), which requires debt collectors to treat you fairly and prohibits them from using certain tactics in attempt to collect on a debt. If you are going to deal with collectors on your own you really should read the full text of the FDCPA. (See below for an outline of what the FDCPA entails).

How to stop contacts from a collection agency
Debt collectors would rather talk to you over the telephone because they can record conversations that could incriminate you. Debt collectors also prefer telephone contact because many feel they can say whatever they want, knowing that you'll have no record of it ever being said. These kinds of collectors are hoping that you are ignorant of the laws that regulate their tactics.

No provision of the FDCPA says you have to communicate with a debt collector by phone. If you hang up on a debt collector there is nothing they can do about it. But, if the collector continues to call you repeatedly even after you have hung up on them, they are in violation of the FDCPA.

All you have to do to stop debt collectors from calling you is tell them that you prefer to communicate with them in writing. Written communication works to your advantage because you then have a record of everything that is said to you. Should the debt collector violate the FDCPA, you have hard evidence of the violation that could lead to a lawsuit in your favor. Keep in mind that, by law, the debt collector does not have to honor this request.

The best way to stop debt collectors from calling you is by sending a cease and desist letter. Your letter should say something like the one below.

Example Letter:


Your Name
City, State Zip

Debt Collector's Name
City, State Zip

Re: Account Number

Dear Debt Collector:
Pursuant to my rights under federal debt collection laws, I am requesting that you cease and desist communication with me, as well as my family and friends, in relation to this and all other alleged debts you claim I owe.

You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the [your state here] Attorney General's office. Civil and criminal claims will be pursued.

(your name)

Once the collection agency receives your cease and desist letter they can communicate with you once more, via mail, letting you know one of three things:

  1. Further efforts to collect the debt are terminated.
  2. Certain actions may be taken by the debt collector.
  3. The debt collector is definitely going to take certain actions.

When you send the cease and desist letter to the debt collector, send it via certified mail with return receipt requested. This will provide proof that the letter was sent and received. If the debt collector communicates with you beyond the single instance allowed by law, this evidence will allow you to seek punitive action against the debt collector.

(NOTE: The FDCPA only applies to third-party collectors, not to original creditors, so do not attempt to use the precepts in this act when dealing with creditors).

Violation of the FDCPA
You can sue a collection agency if they violate any of the following laws in their debt collection attempts:

  • Continuing to report a disputed debt
  • Refusing to follow the VOD (Validation of Debt) process
  • Harassing you
  • Bad check procedures
  • Suing you out of venue- a debt collector may not sue you in a county other than where the contract was signed or where you currently live
  • Making false threats
  • Pretending to be a government agency
  • Third party communications by debt collectors

If a collection agency is willfully violating the law and they refuse to stop, sometimes a lawsuit is necessary. Lost revenue and time in court sends a strong message to the collection agency that consumers will not be treated unfairly.

Before proceeding with a law suit, be sure to take these measures first (even if you do not intend on suing, these measures should be taken regardless):

  • Ask the collection agency to stop the illegal behavior
  • Document everything the collection agency has done
  • File a complaint with the FTC (Federal Trade Commission) and ACA (American Collectors Association)

If you wish to take legal action you may file an action for actual damages you sustained because of the violation. In some cases, the court may assess a penalty of between $100 and $1,000. If you prevail in the action, you are also entitled to reasonable attorney's fees.

Brief Overview of FDCPA
1). Accurate identification and representations. The collection agency, its employees or attorneys must accurately identify themselves when they contact you. They have to be honest with you about the true nature of their business.

2). Information about the debt. In attempts to collect on a debt, the collection agency has to tell you, in writing, the following information:

  • How much you owe.
  • To whom you owe the amount.
  • Unless you dispute the validity of the debt or some part of it within 30 days after you receive the notice, it is considered a valid debt.
  • If you do dispute the debt, they will send you verification of it.
  • Upon your written request, they will send you the name and address of the original creditor. If you do request verification or the creditor's name and address, the collection agency has to stop their collection efforts until they've provided the information. Requests must be in writing within 30 days after you first receive written notice from the collection agency.

3). What the agency tells you, and how they say it. The collection agency has to be truthful about the character, amount, or legal status of the debt, or what it might cost you for them to collect it. They are also prohibited from representing that if you don't pay you'll be arrested or that your property or wages will be seized, garnished or attached, unless the law permits and they intend to take such action.

4). Prohibited threats and practices. A collection agency may not make these threats against you:

  • Use physical force or violence, or any other criminal means to harm you, your property, or your reputation.
  • Accuse you of committing a criminal offense if you don't pay; that accusation would be false.
  • Assign the debt to a third person and claim that this would cut off a defense, or to garnish your wages, seize your property or arrest you, unless they can legally and intend to do it.
  • Communicate to anyone, information (other than nonpayment of the debt) that will defame you.
  • Take any other action that cannot legally be taken or that is prohibited by law, or to threaten any action they do not actually intend to take.
  • Take possession of your property by non-judicial action unless they actually intend to do it.
  • Communicate credit information about you that they know, or should know, is false.

Other practices prohibited by collection agencies:

  • Collecting or attempting to collect the expenses, or anything such as interest or other expenses incidental to the main debt, unless authorized by your agreement with the original creditor or otherwise permitted by law.
  • Publishing a list of debtors that discloses the existence or nature of a debt or advertising a debt for sale by naming you.
  • Demanding money from you unless your debt has actually been assigned to them.
  • Attempting to collect a consumer debt, other than one reduced to judgment, by means of judicial proceedings in some county other than where you incurred the debt, or where you resided when the proceedings were filed, or where you resided when you incurred the debt.
  • Accepting a check postdated by more than five days, unless they notify you (or the person giving the check), sometime between three and ten business days before they deposit it, that they intend to deposit it. Otherwise they may not deposit it (or any other instrument) before the date on it. (They also may not solicit your postdated check or other instrument for the purpose of threatening or institution criminal prosecution.)
  • Advertising the sale of your debt to coerce payment.
  • As to manner of collecting the debt, the collection agency is prohibited from doing anything that constitutes harassment, oppression, or abuse to you. This would include using profane or obscene language. It would also include language whose natural consequence is to abuse you (say, by referring to debtors as "deadbeats") or that disgraces you by stating or implying that you've engaged in some disgraceful conduct, such as having committed a crime.

5). Prohibitions in written communications. Collection agency communications may not convey any embarrassing information about you or the debt that may be seen by others. In fact, the envelope may contain nothing more than your name and address and their name (but only if the name itself does not indicate that they are a debt collector) and address. Postcards are out. These communications also may not give the impression of being authorized, issued or approved by a State or federal court, official, or agency, or anything else it is not.

6). Prohibitions in telephone communications. When a collection agency contacts you by telephone, they must tell you who they are. At the same time, they may not let you incur long distance charges by misrepresenting why they're calling. Nor may they annoy you or harass you by calling you more often than is reasonable. If they want to call you, your spouse, or others at all, it has to be where and when it's convenient to you. Unless the agency knows otherwise, though, they can assume that between 8 a.m. and 9 p.m. is convenient.

7). Contact with your employer. The law restricts a collection agency's contact with your employer. First, the agency may contact your employer only as many times as are "necessary" to collect the debt. However, any contact may be made to locate you or verify your employment, to garnish your wages, or, if the debt is a medical one, to determine if you have or had medical insurance.

8). Contact with your family members. If the collection agency wants to contact family members, they may contact your spouse. But if they want to locate you or if your attorney has consented to the communication in writing, they may contact any family member. If you are a minor, they may also contact parents or guardians with whom you live.

9). Contact with third persons. A collection agency may not communicate with a third person in connection with collecting a debt you owe except to locate you (and this is permitted only subject to stringent limitations), in cases where you've previously given your consent, where they have been authorized by a court of law, or when they have obtained a court judgment and such contact is reasonably necessary to carry out a judicial remedy (for example, garnishing your wages).

For more detailed information on collections issues, refer to the info packet "How To Deal With Collectors" found in Legacy Legal's Learning Center within the Client Login.