In this section, ComparedForMe.com examines everything surrounding debt collection. The more you know about the debt collection process and what rights you have as a consumer, the better you can handle your debt.
Who are Debt Collectors?
A debt collector is a person who works in the in-house collections department of an original creditor or collection agency. Their job is to track down debtors and get them to pay what they owe.
How Far Can Debt Collectors Go?
Obviously, debt collectors have a job to do. Consumers have to respect the fact that when a debt collector contacts you, he or she is fulfilling a duty, just like every other employed citizen does on a daily basis. The problems can begin if or when a debt collector pushes the boundaries to the point that your consumer rights are violated.
To protect these rights, the Financial Services Regulatory Relief Act of 2006 was passed. The Act prohibits debt collectors from displaying certain types of "abusive and deceptive" conduct when attempting to collect debts. We have included a few examples of the rights this Act protects below:
• Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time
• Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt
• Communicating with consumers at their place of employment
• Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer
• Threatening Imprisonment, use of obscene language
We encourage you to become familiar with the details of the Financial Services Regulatory Relief Act, as it outlines your consumer rights in more detail.
How to Communicate with Debt Collectors
The following tips can help you handle debt collectors while protecting yourself as an informed consumer:
• Do not give them your bank account or social security number. Get their contact info & mailing address so you can send a debt validation letter. You never know who may be trying to steal your identity by posing as a debt collector!
• Avoid giving out your employment details, as they are likely to contact you there repeatedly
• If you have made requested payments to them, after your debt is validated, be sure to get an acknowledgement from them. You may also ask them to remove your details from the credit file
Debt Settlement Options
Creditors have one goal in mind: to get paid. If you can’t pay the entire sum of what you owe these creditors, consider debt settlement as an option. Debt settlement means you and your creditor agree upon a one-time payment, which usually covers between 20% and 75% of what you owe them. The creditor forgives the rest of your debt and starts reporting it to the credit bureaus as settled. This form of debt relief allows you to stop making payments to your creditors so you can then put money aside towards your settlement. On your credit reports, $0 will appear on the balances of settled debts. Debt settlement won’t erase any bad credit history on your credit report prior to the agreement, but it can certainly make your financial future seem a bit brighter!
Let’s Sum it Up: Know Your Rights!
We all have basic rights that apply to general life; however, it is important to know your specific rights when it comes to your financial life. Be aware of who you are trusting with important financial information, as identity theft has unfortunately infiltrated the world of debt collection. Once you have received written validation that the debt collector you’re dealing with is legitimate, be very aware of how and with what frequency he or she is contacting you. Simply reading the details of Financial Services Regulatory Relief Act will help you recognize abusive and illegal behavior even faster.
