Advice For Consumer Debtors
Advice For Consumer Debtors
Receiving a call from a collection agency can be stressful. While our collection agency only handles business debts and not individual ones, we’ve created this resource to assist individuals when they are contacted regarding their personal past due bills.
In this guide, you’ll learn:
- What the Federal Debt Collections Practices Act (FDCPA) and how this federal law protects individuals.
- What steps you should take if you’re contacted by a collection agency, including sample cease and desist and request letters that you can send.
- How to find a reputable service to help you deal with collection agencies, credit card companies, and other businesses to help you lower the amount you have to pay and get out of debt.
- How individuals and small businesses can find reputable collection agencies if you ever need help collecting money owed to you.
What is the FDCPA?
The Fair Debt Collection Practices Act (FDCPA) is a federal law that governs the behavior of collection agencies when attempting to collect debts from individuals. It does not apply to collections from businesses or to debts collected by the entity that issued the bill.
The law sets restrictions on how collection agencies can contact individuals, including limitations on timing, frequency of contact, and what can be said. Some key provisions of the FDCPA include:
- Debt collectors can only call between 8:00 am and 9:00 pm, unless other times have been agreed upon.
- It is illegal for debt collectors to harass, threaten physical harm, or threaten arrest. They cannot threaten legal action unless they intend to follow through.
- If you request, verbally or in writing, that debt collectors stop contacting you at work, they must comply.
- A written request is required to stop debt collectors from contacting you at home.
- Debt collectors can only contact friends, relatives, or neighbors once, and they cannot disclose details about your debt.
If a collection agency believes you owe money, they can contact you repeatedly, report to credit bureaus, refer your case to an attorney, or initiate litigation. Ignoring their attempts can lead to damaged credit scores, increased payments, and withdrawal of funds from your bank account.
It is advisable to work with reputable collection agencies to resolve debt issues. However, if a collection agency is blatantly violating the FDCPA, it may be a scam rather than a legitimate debt collection effort.
What To Do If A Collection Agency Contacts You
Although receiving a call or letter from a collection agency can be uncomfortable, ignoring it can worsen the situation. It’s important to take control and address the issue promptly.
If you receive a phone call or message, gather the following information:
- Identify the collection agency: Note the name, address, phone number, email address, case or file number, and the assigned representative’s name.
- Obtain details about the debt: Record the name of the company claiming the debt, the amount owed, the date of the alleged debt, the product or service provided, and any additional charges.
- Request documentation: Ask the agency to provide a written description of the debt, often called a “validation letter” or “debt verification letter.” Request that they refrain from further phone contact until you receive this documentation.
The key is to obtain written documentation of the debt before making any decisions on how to address it. Having a paper trail, whether in hard copy or email, is crucial for follow-up and to ensure resolution. Without this documentation, you may face challenges proving payment if the debt is disputed in the future.
