Protect Yourself and Report the Latest Frauds, Scams, Spams, Fakes, Identify Theft Hacks and Hoaxes
If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector." Yes, some people run up debts and fail to pay what they owe. But there are also debt collection agencies and debt collectors who perpetrate scams on honest people who owe nothing; and debt collectors who clearly violate the law in collecting debts. Debt collectors generate more complaints to the FTC and state Attorney Generals offices than any other industry. Some debt collectors engage in illegal conduct. Some collectors harass and threaten consumers, demand larger payments than the law allows, refuse to verify disputed debts, and disclose debts to consumers' employers, co-workers, family members, and friends. Debt collection abuses cause harms that financially vulnerable consumers can ill afford. Many consumers pay collectors money they do not owe and fall deeper into debt, while others suffer invasions of their privacy, job loss, and domestic instability.You should know that in any situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.
Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.
A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.
A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.
The most important thing to do is to remain calm; arguments do not solve anything. If you get angry you may forget important information. In responding to complaints that bill collectors were abusive, it is often discovered it was actually the consumer who was abusive.
If you are contacted
You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor.
If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.
Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.
If a collection agency is involved, write them as soon as possible (write within 30 days of receiving the initial notice) and inform them you are disputing the debt. The collection agency must then halt collection activity until a copy of the verification is sent to you. It can then resume collection efforts. If the debt cannot be verified, the collection agency must cease activity on your account. During this time you are disputing the debt, the collector may not disclose any information about the debt, without also stating that it is being disputed.
A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
Debt collectors also are prohibited from saying that:
Debt collectors may not:
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
Harassment is difficult to describe in exact terms, but it usually means that a collector used obscene or threatening language with you. This includes calling you names, demeaning your occupation, or questioning the decisions that lead to your account being placed with a collection agency. It is also considered harassment to contact you at unusual hours (usually defined as before 8:00 a.m. or after 9:00 p.m.), or to call so often that it becomes harassing. Remember it is not against the law to be rude, and there is a distinction between rudeness and harassment.
Yes. A creditor can threaten legal action against you. This includes threats to garnishee your wages or seize collateral. However, such action can only be threatened if it is taken in the regular course of business or is intended with respect to your particular debt. Only the creditor has the authority to decide whether legal action should be taken. A collection agency cannot initiate legal action on its own but can recommend legal action to the creditor.
The collector can contact your employer only for the following reasons to verify employment or the amount of your earnings, or to communicate with an employer who has an established debt counseling service or procedure.
Collectors can also contact an employer after a final court judgment has been made on the debt.
Try to propose to pay off the full debt in regular but specific payments. Be prepared to provide evidence concerning your current financial condition. Make sure that the payments are in an amount you can afford. Write both the creditor and collection with your proposal, and you might want to consider including a payment with that letter in the amount of the proposed payment. The payments should be in an amount that would pay off the debt in a reasonable amount of time. Offering to pay $5 a month on a $1,000 debt probably would not be accepted by a creditor or collection agency. If the collector approves these new payments, it is extremely important that you do not miss any payments.
Yes. Once your account goes into default, a creditor or collector can demand any amount they wish, up to full payment of the debt. Although many collectors might accept smaller payments on a regular basis, they are not obligated to accept any offer you make them.
If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.
No. A collector cannot disclose, or threaten to disclose, information about your personal or credit reputation to anyone, without a legitimate business need to know it. Remember, however, that collectors can report accurate information to the credit bureau and that information could end up on your credit report. That can make it hard to get loans, mortgages, credit cards and good rates on any of these.
A collector can contact a third party only to determine if you reside at the location listed on the account. If you've moved, they can also ask for the new address, phone number, and where you are employed. Any further discussion between a third party and a collector is prohibited in most states..
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney' s fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector' s net worth, whichever is less.
Report any problems you have with a debt collector to your state Attorney General' s office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General' s office can help you determine your rights.
Collectors and collection agents may call pressuring people into paying money for past debts. An old debt is one that is older than 7 years or your state's statute of limitations, whichever is longer. Check the statute of limitations for delinquent debt in your state at this chart from Bankrate.com.
You may not even owe the money. But the collector has gone to a bank and bought debt that someone owed from the 1980's or 1990's. Then, the collector looks up the name in a database, calls the person listed and starts screaming at him or her to pay this debt. Anyone with the same name could be contacted.
A debt collector may call you and ask you for payment for this forgotten account, but he can't take you to court or threaten to sue you over it. If he does, he's violating the Fair Debt Collection Practices Act. But be careful how you handle a call about an old debt. In some states, making a partial payment to a debt collector or even acknowledging that you owe the money is enough to make an old debt new again.
Some people get so intimated by the collector that they pay. It is illegal to
try to collect a debt in bankruptcy, so, if you have debt from a a bankruptcy
and get a call, that is a scam. However, if you get a letter in the mail, you
have to dispute the claim. You MUST respond in writing and tell the organization
that the debt is not yours. Otherwise, it becomes your debt automatically. And,
even if you do owe a debt, never give your banking information, or a postdated check, to a collector. Instead, pay via credit card that is not associated with
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.