What Your Debt Collectors Can Legally Do (And What They’re Not Allowed To)

Plagued by a plethora of debt collectors demanding money at odd hours? We are sure you would want to avoid your phone for a while and wonder how to get rid of these unwanted pests. With debt collectors hounding and demanding money, you’re probably anxious about answering your phone, relief is not impossible if you comprehend how debt collection actually works. The hard work lies in becoming debt-free. You must master the Fair Debt Collection Practices Act as it has the rules guiding your debt collectors and creditors when communicating with you.

The Act which protects you

The Act allows us to lessen the frequency or stop those irritating calls and prescribe how debt collectors connect with you. You can appeal for e-mails or mailed physical notices. You can even halt communication altogether and sever all ties from your debt collector.

A request to severe all talks, signals dropping off the creditors’ radar with zero intention of ever repaying dues, and may accelerate recovery of debt by other means. Options exist beyond evading debt collectors till you manage to repay dues. Some guards provided by the Act are;

1. Debt collectors must prove that you owe the debt/s.
2. They must call after 8 am or before 9 pm on any day.
3. They cannot call you at your workplace if you inform them that it could jeopardize your job
4. While legally they can call a friend or family member to find you, a  collector cannot reveal any details about your debt. The CFPB permits only one call to each friend or family  member, in most states.

All about Debt Collection Agencies

Debt collectors are not employees of banks or credit card companies that initially sanctioned credit or provided loans. We refer to people from a 3^rd party company collecting debts on behalf of the creditors; a 3^rd party debt collection organization gets into the picture only after the bill is typically past the due date.  Although this applies to the most common debt collectors, most financial institutions employ internal debt collectors, usually working with debtors who have defaulted and their aim is to ensure your return to financial health swiftly. Should they fail, the debt is referred to 3^rdparty collectors. If that firm is unable to recover your debt, the dues can move to a third collection agency, known as debt buyers.

As per ConsumerAffairs, debt buyers pay the creditors just a small portion of how much you owe while they try to recover the full amount. Most debt sold off to any buyer has generally remained unpaid for a long period. All debt collectors – third party, internal, and the debt buyers must follow rules set by the aforementioned Act. According to the FTC or Federal Trade Commission, the world’s biggest 3^rd party debt collector is a company called Expert Global Solutions. Irrespective of how large the company is, it is bound to follow the rules set by the Act.

Dealing with Debt Collection Agencies: A Step-by-Step Guide

The Golden Rule is never to ignore them as your credit score slides with a likely lawsuit that forces you to repay the debt, followed by wage garnishment! After approval by the judge, the creditor can now take money from your salary before it reaches you. If already saddled with dues, things will get worse as debts pile up? Here’s a step-by-step guide:

Step 1: Check if the Debt Is Actually Yours

The Act requires proof by the debt collector that you actually owe the debt with documents provided from the primary creditor about the amounts owed and when you took the credit or loan.

Step 2: Control Communication

If incessant calls occur and you need relief, you must appeal for the alteration in communication in writing via letter or an email. The Consumer Financial Protection Bureau has some template letters enabling written communications with debt collectors.

Step 3: Maintain Detailed Records

Debt collectors only want to do their job and they are not friends. Maintain files with copies of all letters, emails and phone calls made. You can record the phone calls with debt collectors after notifying them that you are recording. If recording is refused, send emails recorded in writing.  An unrecorded call is substituted by detailed notes about discussions for complaints against abusive debt collectors.

Step 4: Credit Counselors can Help

Repaying a pile of debt is daunting and getting expert help eases the process.  A list of official credit counselors from the Department of Justice is available for your choice.

Step 5: Register a Complaint if Mistreated

Debt collectors may be unpleasant and collection agencies could violate the law with never-ending phone calls or if they threaten you with violence. You must then file a complaint with the CFPB or the FTC. In extreme cases, report the nuisance to the your nearest law enforcement agency or you can even approach the FBI.