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When the Debt Collector Calls
It is around 6 PM and you are just sitting down to dinner and the phone rings. You look at your caller ID and it says "out of area." You answer and say hello and there is no one there. You hang up. The debt collectors system now knows that you are home at 6 PM on weeknights. You may get another call in a few minutes or at the same time tomorrow. This time there will be a live person who should, by law, start the conversation with his name and company name and the purpose for his or her call is to collect a debt. This person will now tell you that you owe, for example, 497.00 to Horizon Telecom. From that point on, the conversation can proceed down many different avenues from professional to downright ugly. This article is about the latter which is unfortunately very common.
I am a moderator on a large internet forum that has the category of dealing with collection agencies as one of its hottest topics. The stories of threats, third party contact and even personal appearances at front doors by third party collectors are shocking, conservatively speaking. The most common is the threat that if the alleged debtor does not have a certain amount of money in the collectors hand by a certain date and time the sheriff will come to their job and have them arrested. This and all other threats that can't be carried out are illegal under the Fair Debt Collection Practices Act. Do the collectors know this? Of course they do. They also know that only one person in one thousand will first, be aware, and second, acually file a lawsuit. When they are sued they usually make a quick out of court settlement and mark it off as the cost of doing business. Going to court is expensive and they can be assesed punitive damages of 1000.00 per violation plus legal fees and court costs.
Most collection agencies are cube hives that have several to dozens of agents sitting at computers with headphones trying desperately to earn commissions on debts that were purchased, in lots, for pennies on the dollar. Many of these are several years old and past the statute of limitations. These statutes vary by state but are usually four to five years.
How to Proceed
Knowing your rights from the onset is paramount in gaining control of the situation. If the person refuses to say the name of the company he works for that is an FDCPA violation. The collector is also required to send a dunning letter within 5 days of initial contact. Make sure you say that you require that statement before you admit to owing anything. Admitting to a debt by trying to make arrangments can restart the statute that may have or is about to expire. Tell the collector that he or she is not permitted to contact you about this by phone or any other means other than the United State Postal Service. If they do that is another violation of the FDCPA. If they continue to give you a hard time politely say "thank you, I will be looking for you statement in the mail" and hang up. If they call back make a note of the date and time which will be supported by your carriers records.
The Statement Arrives
You go to the mailbox a few days later and you retrieve what should be, by law also, a very nondescript envelope with just a PO box as an address. The bill inside will usually have the amount and the name of the original creditor along with a line that will state that if you do not dispute the validity of the debt within thirty days it will be assumed valid. This is also required by law. Now you have a choice. You can pay it or send a request for validation. If you send a validation letter the collector is required under the FDCPA to provide a copy of the original debt and the name of the original creditor. Many will not be able to do this because they will not have it. You are going to ask for a lot more in your letter.
A debt validation letter should demand the the following information:
- Proof that the debt is yours
- Proof that the collector owns or is entitled to collect the debt
- How the collector arrived at the amount they say you owe
- Proof that the collector is licensed to collect debts in the state in which you reside
- Proof that the debt is not past your states statute of limitations.
- If it is an internet payday loan require proof that the lender is licensed in your state as they are usually not.
There is no time frame required for the debt collector to respond to your letter contrary to what I have read elsewhere. It is best to send all correspondence certified mail with a return receipt. Documentation is important. After this letter is sent it has been my experience that about 50 percent of third party collectors will drop the collection and move to an easier target. Also include in your letter a cease communication paragraph telling them not to contact you by any other means but the USPS and forbid them from contacting a third party regarding the debt. They are bound to this by law also.
Years ago debt collectors could parallel psycopathic bounty hunters in their actions. They would call over and over a any hour of the night and morning and tell your kids you were a deadbeat! Anything was OK if it would get them their commission. Then the Fair Debt Collection Pratices Act was legislated and now there are sections 801 through 819 that are in place to protect you, the consumer, against these atrocities, although, as I stated early on, that they still take place every day. Here are some, but not all, of the actions by collectors that are covered:
- A collector can only call between the hours of 8 AM and 9 PM
- A collector cannot threaten a person with arrest, garnishment or any other legal action that the collector does not intend to or is not lagally permitted to do.
- A collector may not represent himself as an attorney unless he is actually an attorney even if he is using an attorneys license for the purpose of collecting.
- A collector can contact a third party one time only for the purpose of locating the alleged debtor but may not disclose the reason for their search.
- A collector may not call a person at work if it is known that they are not pemitted to receive such calls.
- A collector must cease all collection during the validation period mentioned in the previous section.
Here is a link to the FDCPA. If it fails to open please copy and paste to your browser.http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
These laws also apply to law firms that are collecting as third parties also but be warned. You are risking an expensive lawsuit if you try legal dancing with a law firm. They know all the tricks and you will wind up paying court costs and their fees on top of the debt. If you are getting collection attempts from a law firm try to make arrangements with them or if you believe you do not owe the money, get yourself a lawyer if only to write a letter. Better to pay your own attorney than someone elses. Like the old saying goes, a person who represents themselves in court has a fool for a lawyer.
If you feel that your rights have been violated under the FDCPA there are attorneys that will take your case on contingency and you will wind up collecting rather than paying. A good place to start is the National Association of Consumer Advocates