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 Debt Collection Laws Protect Debtors

When a debt collector calls, the conversation can often be so disturbing that you can end up agreeing to something that you may later regret. Even debt collectors must abide by certain rules when trying to collect a debt. The Federal Trade Commission (FTC) outlines the Fair Debt Collection Practices Act (FDCPA) that governs debt collectors and their practices on their website. Here are some guidelines:

Contact

A debt collector may not:

• Call you before 8 in the morning or after 9 in the evening.

• Contact you at your place of work if you tell them you are not permitted to receive personal calls.

• Continue calling you if you have asked them to stop.

• Disclose information about your debt to anyone other than yourself or your attorney.

Unfair Practices

The debt collector may not:

• Threaten to harm you.

• Harass you or use profanity when talking to you.

• Tell you that you will be arrested if you don’t pay your debt.

• Cash a post-dated check before the date on the check.

• Collect interest or other fees over and above the amount you owe.

• Misrepresent himself or herself in any way.

• Misrepresent your debt.

• Give false information about you to anyone or publish your name.

What Can I Do If A Debt Collector Violates The Law?

First of all, don’t let the debt collection agency bully you into taking any unnecessary actions. Send the debt collector a certified letter requesting them to contact you by mail and not by phone. This will allow you to think through your payoff strategy without pressure from the collector. Check with your state to see what the statute of limitations is for debt repayment. It may be that your debt is beyond the statute’s limits and that you won’t be required to repay it. Verify that the debt that you are being asked to pay is actually yours. Request a “validation notice” from the debt collector that will tell you who the creditor is and how much you owe them. This letter will also tell you what to do if the you don’t believe that the debt is yours. Always be sure to keep a detailed record of all phone conversations you have with the collection agency.

If you think that the debt collector has violated any laws, you may report them to your Attorney General’s office and the Federal Trade Commission. You may also sue the collector in federal or state court within a year of the violation. Keep in mind that the debt that you owe does not go way until you pay it even if the debt collector has violated the law.

Three Tips Dealing With Collection Agencies

When dealing with collection agencies there are important tips to keep in mind. It’s important to know if the debt is actually yours and know if it’s a first-party or third-party collection. With first-party collections, a collection agency is hired by the lender. In the case of third-party collections, a lender writes off your debt then sells it cheaply to a collection agency. The agency will collect the entire debt and pocket the profit.

Here are three tips to consider when dealing with collection agencies:

1. Collection agencies are not allowed to harass debtors in any way. Most states only allow three collection phone calls within a seven-day time frame. These calls must be made between 8 a.m. and 9 p.m., Monday through Saturday and 1 p.m. through 5 p.m. on Sundays: no holiday calls are permitted. Collectors may not call family, an employer, friends, or neighbors in order to obtain any information beyond basic contact information. Any call made beyond these limits is considered harassment and should be reported to the local District Attorney’s office.
2. Communicate with collection agencies in writing and require them to do the same, without any other form of contact. This automatically prohibits them from calling you and pertains to payment plans, debt reduction, or any special arrangements. This does not mean they are allowed to send you a bill every day. By communicating through writing, there is documentation if it’s necessary for you to report them for harassment; especially if they choose to be completely uncooperative and disrespectful. 
3. Check the date of the disputed debt because all states have their own statute of limitations. Collection agencies and lenders are not allowed to pursue legal action past this time limit. Be sure the debt is within the time limits because any payment amount will reactivate the statute of limitations.

These tips are useful when collection agencies insist on calling at all hours of the day or night or they refuse to work with you. Sometimes the amount of debt can be negotiated for reduction. Be sure to do this in writing if an agreement is reached and keep all payment receipts for documentation. Before admitting to a debt or making any payments, require the collection agency to provide proof that the debt is truly yours. Reputable collection agencies will work with debtors to form payment plans, possibly reduce debts, and have respect for those they are contacting. You can also demand that the collection agency refrain from contacting you, through writing or by phone.

By following these tips, you can successfully protect yourself and negotiate with creditors who are attempting to collect on a debt. Collections has become a tough business and more and more consumers are falling into traps dealing with them in a genuine attempt to resolve their debt issues.

Fighting Back Against Debt Collectors

You are late with your bills, trying desperately to devise a plan to pay off the debts that you owe and then the phone calls start. It might be one or two a day at first but eventually you find that the debt collection calls are becoming more insistent and when you answer, you find that the voice on the other end becomes more threatening and even harassing. You don’t have the money they are demanding be paid in full right on the spot and they want to argue.

So what do you do when you have debt collectors on your back and you are not capable of meeting their demands? Here are some tips to help you fight back when confronted by a less-than-cordial debt collector who will do anything to make their commission:

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