Many Americans with less-than-perfect credit histories occasionally have to deal with debt collectors. And, if you're like many, you may dread receiving collections calls.
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However, before you speak to another debt collector, you should be fully aware of what they can and can't do in order to attempt to get you to pay the debt. And, fortunately for consumers, the law is generally on your side when it comes to dealing with aggressive collection practices.
What debt collectors can do
A debt collector may attempt to contact you in person, by telephone, by mail, or by fax. They are only allowed to speak about your debt to you or your lawyer, but contacting a third party (such as your friends or relatives) to find out your current address or phone number is perfectly legal.
As far as what the debt collector is allowed to discuss with you, the list is actually quite small. They can tell you how much you owe and who the original creditor was, and can also offer you a settlement amount and work out a payment arrangement. Also, if the debt isn't too old (varies by state), the collector can threaten to sue to collect the debt.
What debt collectors can't do
There are two main categories of behavior that are unacceptable from debt collectors: harassment and deceptive collection practices.
The latter is the more straightforward of the two. Basically, the debt collector cannot make any false claims or accusations intended to trick or coerce you into paying your debt.
For instance, he is not allowed to say he is an attorney (unless he actually is), nor can he tell you that you're committing a crime or threaten to have you arrested. Debt collectors also cannot misrepresent the amount of the debt, or to whom the money is owed.
Harassment is more difficult to define, but there are several things the collector is clearly not allowed to do. For example, the debt collector is not allowed to use any obscene language whatsoever, and he isn't allowed to threaten to harm you in any way. (It's not too common, but it does happen.)
More commonly, debt collectors must tell you exactly who they are and why they're calling. For example, the collector can't pretend to be an old friend in order to get you to start a conversation. And debt collectors will get creative about this, such as saying, "Hey, Joe?" in order to sound like a friend instead of "May I speak to Joseph Smith, please?" It's important to note that this practice is completely legal, as long as when asked, he tells you his identity and intentions.
Where the "gray area" begins is how often they can call you. The law prohibits "repetitious phone calls that are intended to annoy, abuse, or harass you," but it can be difficult to prove what someone "intends" to do. Also, what constitutes "repetitious"? As a rule of thumb, if a collector calls once a day, it's fair play. Anything more could be interpreted as excessive.
And, the debt collector is not allowed to call you at work if you have told them you're not allowed to get calls there. They are only allowed to attempt to call between 8 a.m. and 9 p.m. If you send a written request to the debt collector to stop contacting you, they usually have to abide by it.
And it's important to note that these rules only apply to debt collectors. If the original creditor attempts to contact you, the Fair Debt Collection Practices Act doesn't apply, even though they still have to follow most of the same rules.
What to do if your rights are violated
According to the Consumer Financial Protection Bureau, you should keep good records of any communications (written or verbal) with a debt collector. Write down dates and times of all conversations, as well as specific notes on what was discussed.
If you think your rights have been violated, the first thing to do is submit a debt collection complaint with the CFPB. Or you can report the collector to the Federal Trade Commission's website.
As a last resort, you have the right to sue a debt collector for violations of the Fair Debt Collections Practices Act within one year from the date you believe the law was violated, and in some states the timeframe is longer.
In a nutshell
It is generally a good idea to talk to your debt collectors at least once and try to come to an amicable solution. You may be surprised at how much power you have to negotiate a lower settlement amount or to spread out your payments. After all, the collector probably purchased your debt for mere pennies on the dollar, and doesn't need to collect too much money from you to make a profit.
However, if after you've spoken you don't see things going anywhere, you are free to hang up and break off contact with your debt collector. Just be aware that the debt is still yours (even if the collector violates the law) and the collector can pursue you through other means, like a lawsuit.
