Preserve your rights against debt collectors to make sure you’re being treated fairly
If you’ve been contacted by a collection agency, don’t be afraid, feel ashamed, or become nervous. Remain firm and stand your ground. Never allow yourself to feel manipulated or bullied. You will never, ever go to jail for not paying a debt. Take a deep breath, learn your rights, arm yourself with knowledge and prepare to fight back. You have more power than you probably realize.
The lies, manipulation and deceit of some collection agencies
A collection agency may contain hundreds of employees who are armed with thousands of people’s personal information stored in a computer database. Usually they are paid off a commission and every penny extracted from you benefits their pocket. If collectors reach certain quotas, they might receive fat bonuses as incentives to aggressively collect.
Some agencies are renowned for unethical techniques used to terrorize innocent victims into paying debts. Intimidation, deception and any feasible manipulative means are implemented to ensure quick and efficient payments.
I once knew a debt collector who lied and said he was from Dominos pizza. He was desperate to track down a certain individual in order to collect on the debt and receive his pay day bonus! This may seem harmless in itself, but it is also extremely unethical and *illegal*
What else is illegal?
- A debt collector may not harass you or use intimidating language against you or attack your personal character in any way
- May not call you before 8 a.m. or after 9 p.m. without your specific consent
- May not continue calling numerous times per day, with the sole intent to harass
- May not call your workplace without your employer’s consent
- Can not use false or deceptive statements, such as misrepresenting themselves as attorneys or government officials (or Dominos pizza men;)
- Can not threaten to send you to jail or insinuate you are a criminal
- Can not send you misleading documents that can be construed as legitimate legal papers, such as issuing a false summons
- Can not threaten to garnish your wages or file a lawsuit unless they intend to
- May never threaten you with violence
- Can not be deceptive in misrepresenting the amount of debt they claim you owe
NEVER give a debt collector your bank account information or pay by check with a traceable routing number. Many folks in this industry have no qualms on cleaning out your account and helping themselves to much more than you initially agreed upon.
There’s another pertinent reason not to immediately fork money over until a debt has been properly validated – the debt may, in fact, legally be expired.
Debt Statute of Limitations
Did you know that debts expire after a certain amount of time passes? This is why paying any amount towards an old debt might be one of the stupidest things you could possibly do in some cases.
If you haven’t paid toward a debt in a long time, after a set number of years after the account has gone delinquent (usually four to six years – depending on state), you’re no longer under legal obligation to pay the debt. This is called a debt’s Statute of Limitations (or SoL).
However, every time you pay towards a debt before it’s Statute of Limitations has arrived, you’re resetting the clock on the debt. If you’re a few months away from your SoL and pay any portion thereof, the legal timer starts all over again. You’ve just unwillingly renewed your debt, and an agency is legally able to continue pursuing collection from you for another four to six years (depending on your specific state’s SoL).
How ironic is that? In a sense you’re being punished for trying to partially pay what you can on a debt you necessarily can’t afford to pay off.
Be warned also; in some states just admitting guilt on the phone by agreeing to payment is enough to reset the SoL timer – so tread carefully and use common sense. Make sure the agency first coughs up all appropriate legal documents to prove the validity of the debt.
If you don’t know what the debt is or if you suspect the debt may be approaching or past its legal SoL, demand a validation process immediately.
It’s imperative to never admit fault to a debt or agree to pay any amount toward a debt until the debt has been properly validated in writing by the collection agency.
Use Debt Validation To Protect Yourself
Why is this imperative? Because ironically, the majority of the time the collection agency *can’t* properly validate the debt, especially if it’s old. They have a hard time producing the proper legal documents to legitimize that you actually owe a debt.
Many times these scumbag ‘bottom feeders’ bought the debt from the original creditor for pennies on the dollar. Now they’re in diligent pursuit to make your life miserable, and will attempt to strangle as much money out of you as they possibly can. This isn’t even mentioning -on top of- charging exorbitant fees.
For example, a collection agency may pay $20 for an old, SoL $1,000 + debt, and will do anything they can to intimidate the victim into paying. Anything they receive past their initial investment of $20 is lining their pockets and making them extremely wealthy.
And don’t be surprised if the debt has magically morphed into an outrageous sum.
The good news is once you actually challenge these collection agencies, many times they’ll suddenly (and very conveniently) disappear. They’ll sell your debt for a reduced cost of $10 to another collection agency, and then someone new will start to call and harass you.
According to The Credit Info Center, collection agencies may pay for portfolios of debt at the following rates:
- Recently been charged off: 6 to 7 cents on the dollar
- Accounts that are slightly older and on which a collection agency or two has already taken a whack: 1.5 cents to 2 cents on the dollar.
- Years-old, out-of-statute debts: A penny or less.
These types of sleazy debt collectors are famously known as bottom feeders, zombie debt collectors or junk debt buyers.
What to do if you’re contacted by a collection agency
If a collection agency contacts you over the telephone, politely ask for their name and contact information. Then firmly state you’d like further information about this alleged debt and will be in touch shortly for validation purposes. Immediately hang up the phone.
At the very least, figure out what debt collection agency is contacting you, and then immediately HANG UP. Just knowing their relevant contact and mailing information is all you’ll need to take the next crucial step in fighting back.
Before validation never, ever admit guilt of a debt.
Your conversation will be recorded and any slipup or naive language on your part can be used against you later if it should go to court, especially if you unknowingly use language that admits fault to an alleged debt. So stay off the phone to protect yourself. Keep all further correspondence strictly to writing.
I strongly recommend not speaking with a debt collector over the telephone under any circumstances. You are under no legal obligation to speak with a debt collector over the phone and, in fact, it’s one of the most foolish things you can do.
The debt collector is banking on the fact they can use intimidation scare tactics to shaken the situation and cause you to slip up. They hope you’re uncertain and, unfortunately, like the majority of their victims, aren’t properly aware of your legal rights.
Collection agencies will use any tactics necessary, even extremely unethical ones, to get you to admit fault or force any type of payment.
This is especially true if the debt is an old zombie debt. The collector is desperately trying to force you into unknowingly resetting your Statute of Limitations, especially if the debt is drawing closer to expiration. They know once SoL hits, they’re powerless to legally collect from you.
Remember, paying any portion of a SoL debt is admittance of guilt and will renew the debt and start the ticker again – even if the debt is all ready expired.
Deception is rampant in this industry. Protect yourself as thoroughly as you can with knowledge. Bare in mind that collection agencies have no power and should not be trusted.
Put the Collection Agency on the Defensive With Validation
Once a collection agency has contacted you, now it’s time to immediately take control of the situation and put the collection agency on the defensive. Force the collection agency to first legally validate the debt by proving you actually owe it.
NEVER agree to make any type of payment towards an alleged debt unless you receive proper written validation and must settle as your only option. I can’t stress this enough. Any payment agreement between you and the debt collector is your immediate admittance of fault. In some states it’s also enough to reset your Statute of Limitations.
First make the collection agency responsible for proving you owe an alleged debt still within the Statute of Limitations.
And then make them prove they are legally entitled to collect from you.
You will not receive this type of courtesy unless you demand it.
Restrict all correspondence to writing and keep a record of every type of documentation you receive from the collection agency. Send *everything* certified mail with return receipt requested to keep for your own records. This is crucial in providing accurate proof and documentation that you are trying to resolve the matter but the agency has thus far failed to prove you legitimately owe them anything.
All right, so you have the collection agency’s address. You’re pissed because these scavengers are making billions every year off the misery of others with their sleazy tactics. You’re ready to challenge them and stand up for your rights.
So now what?
- Validation letter. This is the ultimate weapon in your arsenal to get rid of many unscrupulous debt collectors. After you’ve been contacted by a collection agency, you’ll want to force them to validate the debt to prove you actually owe them something, and that the debt hasn’t expired past the SoL.
- Limited cease and desist. If these buggers will not stop calling, you can legally force them to by issuing a limited cease and desist request in writing (illustrated below)
Send a validation letter immediately by certified mail with return receipt requested. Here’s an example of a validation letter
123 Your Street Address
Your City, ST 01234
123 NotOnYourLife Ave
Re: Acct # XXXX-XXXX-XXXX-XXXX
Dear Scumbag Collector:
This letter is being sent to you in response to a notice sent to me on February 15, 2007. Be advised that this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and validation is requested.
This is NOT a request for “verification” or proof of my mailing address, but a request for VALIDATION made pursuant to the above named Title and Section. I respectfully request that your offices provide me with competent evidence that I have any legal obligation to pay you.
Please provide me with the following:
* What the money you say I owe is for;
* Explain and show me how you calculated what you say I owe;
* Provide me with copies of any papers that show I agreed to pay what you say I owe;
* Provide a verification or copy of any judgment if applicable;
* Identify the original creditor;
* Prove the Statute of Limitations has not expired on this account
* Show me that you are licensed to collect in my state
* Provide me with your license numbers and Registered Agent
At this time I will also inform you that if your offices have reported invalidated information to any of the 3 major Credit Bureau’s (Equifax, Experian or TransUnion) this action might constitute fraud under both Federal and State Laws. Due to this fact, if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you for the following:
* Violation of the Fair Credit Reporting Act
* Violation of the Fair Debt Collection Practices Act
* Defamation of Character
If your offices are able to provide the proper documentation as requested in the following Declaration, I will require at least 30 days to investigate this information and during such time all collection activity must cease and desist.
Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel for suit. This includes any listing any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is.
If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately.
Also include a limited cease and desist clause.
I would also like to request, in writing, that no telephone contact be made by your offices to my home or to my place of employment. If your offices attempt telephone communication with me, including but not limited to computer generated calls and calls or correspondence sent to or with any third parties, it will be considered harassment and I will have no choice but to file suit. All future communications with me MUST be done in writing and sent to the address noted in this letter by USPS.
It would be advisable that you assure that your records are in order before I am forced to take legal action. This is an attempt to correct your records, any information obtained shall be used for that purpose.
Remember That You’re Not Alone
There is a plethora of information available on properly handling debt collectors and junk debt buyers. I am by no means a professional or a lawyer and I strongly urge everyone to take the time to properly do their research.
These techniques are powerful in fighting against unethical and illegal collection tactics. But they only work if you know how to use them properly.
You can also follow my personal journey on the nightmare of being sued and fighting an invalidated debt. As an update, I filed my answer with the court last month and, ironically, have yet to hear from the ‘law firm’ again.
Arm yourself with as much knowledge as possible and protect yourself from victimization and abusive practices. Even if you legitimately owe a debt, you still have the right to be treated fairly and have your privacy respected.
- Privacy Rights Debt Collection Practices
- Federal Trade Commission Fair Debt Collection Practices Act
- CreditBoards.com forums
Addendum 12/23/07 – The above article pertains to collection agencies only and not the original creditor(s). Collection agencies are covered under the Fair Debt Collection Practices Act and must validate if a debt is disputed, even if working on behalf of the original creditor. If the original creditor is contacting you directly, however, they are not regulated by the FDCPA and have no legal obligation to validate a debt to the consumer.
- Broke-Ass Student Just Got A Whole Lot Broker
- Being Sued For Credit Card Debt
- By Taking Control of My Finances, I Took Back Control of My Life