This week's blog is about being harassed by collection agencies. (Which is no fun, if it is happening to you.) However, as consumers, we do have recourse. Whether the debt is valid or not, and yes, both circumstances to occur, you do have rights. A simple breakdown of those rights may equip you to better manage those calls, and the folks on the other side.
There is this thing call the Fair Debt Collection Practices Act (FDCPA), which among other things, governs the behavior of creditors and their interaction with you, the consumer.
Here's a break down of what they can, and cannot do, taken from the FDCPA and the FTC website.
WHAT TYPES OF DEBTS ARE COVERED? The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.
CAN A DEBT COLLECTOR CONTACT ME ANY TIME OR ANY PLACE? No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.
Debt collectors can contact you by phone, letter, email or text message to collect a debt, as long as they follow the rules and disclose that they are debt collectors. No matter how they communicate with you, it’s against the law for a debt collector to pretend to be someone else — like an attorney or government agency — or to harass, threaten or deceive you.
HOW CAN I STOP A DEBT COLLECTOR FROM CONTACTING ME? If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:
WHAT DOES THE DEBT COLLECTOR HAVE TO TELL ME ABOUT THE DEBT? Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.
CAN A DEBT COLLECTOR KEEP CONTACTING ME IF I DON’T THINK I OWE ANY MONEY? If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
WHAT PRACTICES ARE OFF LIMITS FOR DEBT COLLECTORS?
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
CAN A DEBT COLLECTOR GARNISH MY BANK ACCOUNT OR MY WAGES? If you don’t pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.
CAN FEDERAL BENEFITS BE GARNISHED? Many federal benefits are exempt from garnishment, including:
DO I HAVE ANY RECOURSE IF I THINK A DEBT COLLECTOR HAS VIOLATED THE LAW? 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, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.
WHAT SHOULD I DO IF A DEBT COLLECTOR SUES ME? If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
WHERE DO I REPORT A DEBT COLLECTOR FOR AN ALLEGED VIOLATION? Report any problems you have with a debt collector to your state Attorney General’s office, the Federal Trade Commission, and the Consumer Financial Protection Bureau. Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.
Ed-Jack Dvorak is National Affiliate Liaison at Credit Dr., a national credit restoration company. He works with clients and creditors to improve credit profiles.