In 2013, the FTC received more than 204,000 complaints against debt collectors - the third parties who collect debts for banks and other businesses. The number of complaints is a clear sign that that debt collectors don't always follow the rules. Knowing your rights when it comes to debt collectors can help you decide whether to deal, or not deal, with collection agencies.
Do you know what a debt collector is?
When banks and other businesses have trouble collecting payment from debtors, they hire a debt collection agency to collect the debt. Debt collectors must practice within the limits of the Fair Debt Collection Practices Act to get you to pay a debt. Unpaid debt collections might appear on your credit report, affect your credit score, and keep you from getting other credit cards, loans, jobs, and apartments.
Is the collector calling during the allowed times?
The FTC receives hundreds of complaints about collectors calling outside the allowed times. There may be more instances, only consumers didn't complain to the FTC about them. Debt collectors can only call you during certain times of the day. If a collector calls outside those times, it's in violation of the FDCPA.
Do you want the debt collector to stop calling?
You have the right to stop debt collection calls. A request over the phone isn't enough, though. To keep a collector from calling you, you should send a written cease and desist letter telling the collector not to contact you. Keep in mind a cease and desist letter only works for that specific collector. You'll have to send a separate letter to each collection agency that's calling you.
Is it your debt?
Don't take for granted that the debt actually belongs to you just because a debt collector says it's your debt. Debt collectors are hardly konwn for their honesty. The CFPB says one of the top complaints about debt collectors is that they're collecting the wrong debt from the wrong person.
You have the right to request the debt collector to verify that the debt is indeed yours and that they have the right to collect it. This means they have to provide some kind of documentation from the original creditor. If the collector can't provide this proof, they can't collect from you.
You only have a certain amount of time to exercise this right, so send your validation request as soon as a collector contacts you for the first time.
- Debt Validation Requires Collectors to Prove Debts Exist
- Debt Validation FAQ
- Sample Debt Validation Letter
Has the statute of limitations expired?
The statute of limitations is the amount of time a debt collector can legally sue you for a delinquent debt. The statute of limitations varies by state and usually ranges from three to six years. Debt collectors might try to sue you even if the statute of limitations has expired, but you have to prove, in court, that the SOL has expired and to have the lawsuit dismissed.
Has the collector violated your rights?
There are a number of things debt collectors can't do. For example, they can't ask you to pay more than you owe and they can't threaten to sue you if they can't or won't. If a collector has violated your rights, you can sue them for actual damages plus $1,000 in punitive damages.
Should you pay the debt?
If the debt is old, say more than seven years old, you might just forget about it. After all, the statute of limitations and the credit reporting time limit are likely to have expired. There are moral obligations to consider, too. Paying back what you owe is the right thing to do.
Can you have the debt deleted from your credit report?
If the collection appears on your credit report, it's best for your credit score to have it removed. Some collectors will delete the collection in exchange for payment. Others are adamant about keeping the collection on your report. When you can convince the collector to remove the entry from your credit report, make sure you get the agreement in writing. This way you can force the collector to hold up its end of the deal.