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.

The Wrong Way To Deal With Debt Collectors

For every situation in life there is a right way to respond and a wrong way to respond. In the case of financial decisions, making the wrong choices can often result in negative consequences down the road. One of the consequences you might face if you have managed your finances poorly or face a financial hardship is having to communicate with collection agencies and debt collectors. When it comes to dealing with debt collectors- reacting the wrong way can end up costing you big time in the end. Here are a few examples of what NOT to do when dealing with a debt collector.

• Do not agree to make a payment without a confirmation notice. If you and the debt collector have come to some sort of agreement on payment, make sure you get this agreement in writing. Failing to do so might result in an account that remains active despite the fact you paid the “agreed” amount.

• Do not lie. The truth shall set you free, alright- perhaps not in all situations but in this case you should avoid lying to a debt collector. They are notorious for not playing by the rules and if you get caught in a lie, they will likely use it against you at some point. Not to mention it is much easier to keep track of the truth.

• Do not allow yourself to be bullied. Debt collectors get paid based on how much debt they collect. They have a vested interest in doing whatever it takes to get you to pay. Although the Fair Debt Collection Practices Act prohibits certain tactics, that is not to say they are never used against consumers. Know your rights and refuse to allow a debt collector to treat you in a disrespectful or intimidating fashion.

• Do not agree to a payment you cannot make. You may be tempted to agree to send a payment knowing you will not have the money to do so. So you are either lying or you will send a check that is going to bounce like a rubber ball. Both scenarios end badly for you, as you give the creditor more ammunition in a court case. If you say you can pay then pay and if not, don’t make the promise.

• Do not pretend they don’t exist- Debt collectors will call incessantly and sometimes you might just think it better to avoid the calls or ignore the notices in the mail. This rarely works out in your favor. The calls will keep coming until one of two things happen, you pay your debt or you get sued. This is one situation where you have to face the facts and come up with a plan to address the debt.

• Do not authorize automatic drafts from your bank account. Never, ever give you checking account information to a debt collector. You can agree to send a payment, but should you authorize a debt collector to deduct money from your account you no longer have control over how much and when deductions might appear. Retain control and avoid a situation where a higher payment amount or multiple payments are withdrawn without your consent.

Dealing with debt collectors is something we all want to avoid. Unfortunately with the current state of the economy, people are struggling financially making it a reality for many. By knowing what you should and should NOT do when dealing with a debt collector you increase the odds of coming out the winner in this situation.

How to Get a Collection Agency to Work With You

We’ve experienced, or at least heard about, the endless stories of dealing with harassing debt collectors, trying to collect on debts and using rather low tactics to do so. While it is true that there are some debt collectors and collection agencies that can be over the top, it is also true that not all are evil. In fact, some are more than happy to work with you so they, in turn, can collect their own fee. Working with collection agencies can be difficult but if you truly owe the debt, you’ll need to find a way to resolve the matter as peacefully as possible to keep from further marring your credit history.

Here are some tips and tactics you can use to get a collection agency to work with you and not against you:

Be Professional, Not Defensive
Just as you’ve heard of the tough tactics used by collection agents, so too have collection agents heard every excuse (and likely cuss word) in the book. The truth is many collection agents are used to the fits people throw when faced with an uncollected debt. The key to getting them to hear you out ans work with you is to be patient, straightforward, and reasonable. If you try to act in a professional manner, the more likely the agent will be willing to listen and be reasonable themselves. If you act defensive and insulting, you’re likely to get no where. If you find that no matter how professional and polite you are, the agent acts unreasonably, request to speak to a manager to resolve the issue.

Ask For Proof
Even if a debt collector is the nicest person on the planet, you’ll still want to prove the debt is yours, especially if you are unsure. Ask them to prove written proof of the debt and the total amount owed. They should mail you the evidence and if you can not prove you’ve paid the debt, you’ll need to negotiate the matter. Ask if the company is willing to settle for half the amount owed. If they are not willing to agree to that, ask what they are willing to do to reduce the balance. Whatever is decided, get it in writing.

Be Upfront About Payment Ability
While many creditors will hound you for the full balance, don’t be intimidated into paying more than you can. If you have the full balance and can pay in one lump sum, do so. You’ll need to understand for yourself just how much you can afford to pay and how regularly. No matter how much they try to steamroll you into a different arrangement, stick to your guns and only make the promises you can keep.

Keep Your Promises
If a collection agency sees you are making every effort to pay as negotiated, there isn’t much room for them to complain. Keep making payments on time or more if possible just to clear the debt faster. Ask the agent to mail regular balance statements so you can see your progress and ensure your payments are being counted.

Confirm the Fulfillment of Payment
When you have reached the end of your debt payments, be sure that you receive written confirmation reporting the debt as paid in full. You’ll also want to order a copy of your credit report to be sure the debt is listed as being paid. You might be able to find out directly from the collection agent how exactly the debt will be reported to the credit bureaus so you’ll ensure it’s been taken care of properly.