The dos and don’ts of debt collection: what you need to know
Collection calls are something none of us ever want to experience, and honestly, in our world awash with phishing, scams and fraud, it’s important to make sure the collection is actually legitimate. Fake collectors will demand payment of a debt you don’t owe – perhaps convincing you that someone has accumulated that debt in your name. However, according to the Collection Bureau of America, about 28% of Americans have at least one debt, whether it’s credit card debt, student loans, or medical bills.
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Debt collection is tricky. It is the task of a collection agency to collect services rendered. While they may seem extremely stubborn at times, which can be intimidating, it’s also important to understand that they’re not out to make your life miserable. However, the Fair Debt Collection Practices Act (FDCPA) states that they must not harass, oppress, abuse or deceive anyone with whom they come into contact. So if you think you’ve been treated unfairly, you have every right to report it. Knowing your rights will help you better handle those calls when the situation arises.
Here are the dos and don’ts of debt collection:
Don’t ignore it: Debt collectors have a job to do. They can contact you by phone, email, letter or even social media. Although our instinct is to ignore their attempts to contact them, it will not make them or the situation go away, and they may file a lawsuit against you in court. So it’s better to address it and find a solution.
Don’t be awkward or combative: Debt collectors actually want to help you recover goods you have bought or services you have provided. Work with them to find a mutually reasonable solution. Whether it’s a lower agreed amount owed or a payment schedule, they’re generally willing to work with you in some way. It is important to keep a cool head and a pleasant demeanor. Again they are just doing their job.
Make Records: It is important to log all information and conversations you have with collection agencies. Write or write down the date, time, company name, address, phone number, and names of people you spoke to, as well as the amount you claim to owe and the name of the creditor. This way you can keep track of how often they call, as well as any conversations or exchanges.
Try to settle down: Debt collectors often have the ability to negotiate or settle debts. This means that if you agree to pay in advance, they may charge less than the amount owed. They realize that many debts remain and will remain unpaid, so they are content if they can get even something. If they don’t agree, they should at least be able to come up with a payment plan.
Request copies of the original documents: If a collection agency contacts you, ask for documentation of the original invoices. This request must be made in writing. Fees may apply due to late payment. Therefore, be sure to request a detailed listing of ownership, including any additional interest, late fees, or collection fees.
If you get a call from a collection agency, it’s important to know your rights. Gather as much information as possible and record everything. Knowing these few simple steps will ensure your privacy and security. Consult an attorney if you are ever in doubt about the process or if you feel the collection agency violated your rights. For more information, visit: ftc.gov/debtcollection.
Author: Ben Branson is a senior member of the law firm of The Cavanagh. His practice focuses on complex civil litigation, including corporate litigation, real estate litigation, insurance defense and creditors’ rights.