Debt Collection Agency Held Accountable For Illegal Practices

Anyone who is currently or in the past dealt with debilitating debt knows the anger, frustration and sometimes fear that accompanies debt collection practices. It has often been said that debt collectors are people just like you or I, trying to do their job. Sadly there are times when these individuals or agencies for which they work break the law when attempting to collect delinquent debt. While no one is suggesting that debtors be treated with kid gloves, each person has the right to be treated fairly and with respect. In fact the Fair Debt Collection Practices Act was established to ensure debtors are not harassed or abused by debt collectors.

There are companies out there who abide by the rules and regulations in place, however not all debt collection agencies play by the rules. The Federal Trade Commission has recently closed a case which involved the Academy Collection Service Inc., a collection company based in Pennsylvania. The FTC announced they have agreed to a settlement with two individual defendants who worked with the company. These individuals and Academy Collection Service have been accused of misleading, harassing and threatening debtors. Other claims against the company include: depositing postdated checks before the date and disclosing debt information with unauthorized parties. All of these actions are illegal and in violation of federal law.

With the number of credit card delinquencies on the rise as a result of the rough economy, it is important for consumers to know what their rights are when it comes to debt collection. If you are being hounded by a debt collector do not assume you have to take their abuse or harassment. Here are a few reminders on how to deal with debt collectors.

• Fair Debt Collection Practices Act- If you are not already familiar with this Act you should immediately familiarize yourself with the rules and regulations. By doing this you can quickly spot when a debt collector has crossed the line.

• Request Validation- Mistakes can be made and many times an account which should have been recorded as paid falls through the cracks and ends up in collection. If you feel you are being contacted about a debt that you are not responsible for, request validation of that debt. The debt collector has a legal obligation to verify certain information proving you are responsible for the debt in question. You must request validation within 30 days of receiving notice from the debt collector. Once you have requested validation the debt collector must cease all collection activity until they have provided the required documentation.

• Proceed With Caution- Whenever you are dealing with a third party collection agency make sure you document all correspondence. Confirm all details, settlements and other agreements in writing. Try to remain calm and do not allow a debt collector to harass or abuse you as it is against the law.

Currently the FTC is determining if additional regulations would resolve some of the problems in the collection industry. Until more protection is available it is up to each individual consumer to ensure their rights are protected.

How To Dispute A Debt

Many people who are struggling with high debt balances tend to avoid reviewing their credit report. After all, who needs to be reminded that debt is overtaking their life? Well the cold hard truth of the matter is this; everyone needs to know what information has been reported to the credit bureaus in the event the information is incorrect. When incorrect information is spotted on your credit report or worse you begin getting calls from a collection agency for a debt that is not yours, you have only one option to remedy the situation and that is disputing the debt. The following information will show you how and why you should dispute a debt that you believe to is not your responsibility.

If you are being hounded for a debt that is not yours or see an invalid debt recorded on your credit report, you must take the steps necessary to remove the debt from your record. These tips will help you when disputing a debt.

• Understand your rights- Debt collectors must provide documentation of each debt if you believe the information is incorrect. Your credit report will be protected if you dispute incorrect information withing thirty days of collection proceedings. If you are unable to get things rolling in that period of time, you can still stop collection efforts temporarily by requesting in writing that documentation of the debt be provided for your review.

• Dispute letter- When you request information regarding a debt, you want specific information. Ask for an itemized, detailed statement which clearly shows how much you owe and why. If a collector is unable to provide such information, they cannot legally collect the debt from you.

• Contact the original creditor- With so many accounts being sold off to collection agencies, it is possible proof of payment got lost in transition. If you dispute your debt with a collection agency which they are unable to prove belongs to you, you might think you are finished. Unfortunately they can then in turn resell the debt to another company and the entire process begins starts over anew. For this reason you should go back to the original creditor with any proof you have showing you have paid the debt in question.

• Clearing your account- If you have disputed a debt or otherwise proven the debt is not yours, request a letter indicating the debt has been cleared. Once you have received this letter you can use it to dispute future claims on that debt as well as forward it to each credit bureau with a request to clear up any negative marks on your report resulting from the invalid debt.

Disputing a debt can be a frustrating and time consuming task, however it is necessary to fix the problem or risk having to deal with it for years to come. Remember you should only dispute invalid debts, if you legitimately owe the debt in question do not dispute the debt in an effort to avoid having to pay. The credit bureaus do not verify debts, they simply record information as it has been reported to them. If you fail to dispute an invalid debt, you will either have to pay a debt that is not valid or risk having that debt follow you forever causing problems with loans and other financial goals.

How Do Collection Agencies Work?

Most people don’t really worry about how collection agencies operate until they are in a position where they are on the receiving end of communication from a collection agency. As our nation continues to struggle with a weak economy more and more people are finding themselves in a position they have never been in before. If you find yourself falling behind on monthly bill payments you may soon discover how frustrating, humiliating and intimidating it is to deal with a collection agency. By understanding how collection agencies work you will be better prepared if you find yourself dealing with one in the future. Read more