It should come as no surprise that if you’ve fallen behind on your bills, you may be hearing from debt collectors. If they do call, you will almost certainly hear that you need to pay them and that you need to do so immediately. But there are a number of things that they aren’t likely to tell you, and knowing these things can make all the difference in resolving your debts.
[Free Credit Calculator: Use Credit.com's Credit Report Card]
1. Some of their threats have no teeth.
If you can’t pay the collector the amount he is demanding, or refuse to give your bank account or debit card number to make the payment, the debt collector may threaten to “put you down for ‘refusal to pay.’” But that’s “a meaningless phrase in the debt collection world,” says ZipDebt.com founder Charles Phelan, who coaches consumers trying to settle debts. He elaborates:
When a collector says, “We are going to inform your creditor that you are refusing to pay this bill!” they are just using reverse psychology. Your creditor has already figured out that you aren’t paying the bill, or they would not have sent your account to a collection agency in the first place!
Another example? Bogus deadlines. Says Phelan, “Collectors will always try to create a false sense of urgency by imposing a series of deadlines, after which ‘this deal will no longer be available.’ The reality is that settlement or workout offers tend to improve over the course of a typical 3-month collection assignment (i.e., in a non-legal collection scenario).”
CHECK YOUR CREDIT
Credit.com’s Credit Report Card
Check your credit bureau profile for free with this great tool. See your detailed credit evaluation, expert advice on managing your credit, and unlimited free updates every 30 days.
Get Started Here »
[Featured Products: Compare credit score, report, and monitoring plans at Credit.com]
2. They have to stop bugging you at work if you tell them to.
The Fair Debt Collection Practices Act is very clear on this point. Once you tell a debt collector your employer doesn’t allow you to talk with her while you are at work, she must stop calling you there. Yet in its 2011 Annual Report to Congress about Fair Debt Collection Practices Act complaints, the Federal Trade Commission noted that in 2010 it received 17,008 complaints related to debt collection calls to consumers at work, up from 11,991 complaints the year before. “By continuing to contact consumers at work under these circumstances, debt collectors may put them in jeopardy of losing their jobs,” notes the FTC.
3. They can’t blab about your debts to others.
Debt collectors are generally only allowed to discuss your debt with you, a cosigner, your spouse, or your attorney. They cannot discuss your debt with neighbors, relatives who aren’t obligated to pay the debt, or coworkers. In fact, under the FDCPA, they are generally only allowed to contact third parties to locate you, and once they have found you, contact with third parties must stop. Sukhman Dhami of the consumer law firm Dhami Law Firm, P.C., explains:
We call these ‘third party disclosures’, a violation of Section 1692c(b) of the Fair Debt Collection Practices Act, and they are exceptionally common, particularly when the debt collector leaves a message on a public answering machine. These public answering machine violations are called “Foti” violations after the landmark case Foti v. NCO Financial Systems, 2005.
If a debt collector leaves a message for you on any conventional answering machine or any shared/open access voicemail system, they are likely to violate the third party disclosure restrictions per Foti, so save any machine message and/or voicemail which a debt collector leaves for you!
He goes on to warn, “If a debt collector contacts third parties, we want to know about it, because chances are that the collector violated one or more provisions of the FDCPA.”
Image: ConvenienceStoreGourmet, via Flickr
Gerri Detweiler Gerri Detweiler is Credit.com's Director of Consumer Education. She focuses on helping people understand their credit and debt, and writes about those issues, as well as financial legislation, budgeting, debt recovery and savings strategies. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.com.
{ 41 comments… add a comment }
What happens if a collection agency didnt validate the debt? I had retained a lawyer to fight the collection agency, they settled out of court paying me a settlement, and state that they no longer hold the loan and it was given back to the original creditor, but they haven’t removed the item from the credit agencies/credit report. The dates on the collection on my credit report were inaccurate. Do they have to remove this from my credit report since they no longer carry the loan?
Thanks for any and all insight/advice.
Will
write a letter of dispute and send it to the credit agency…also get your free credit reports and see if they did an inquiry on your credit and ask for that to be removed to.
If a debt collector has only left voice mail on your phone and has not provided a statement in the mail concerning the debt but willing to fax the info, which is better from the debtors stand point,a fax or the mail Before doing any transactions..
Do not accept a fax as a substitute for written confirmation of the debt. Written confirmation is required by law. If they did not send it their are either breaking the law or a scammer.
Thanks so much that’s helpful to know, by the way the company is bay area credit,I looked them up but got vague or little info, I did discover that they are not b.b.b. Accredited, would u know if they are legit?
Offhand, no I don’t. I’d suggest you call your state attorney general’s office as a start to find out if they are licensed to do business in your state.
I have been paying monthly to this firm. I just received a letter asking for full payment and when I called to ask they informed me that it is a new debt. The original creditor pulled it and now they have reopened it as a new account. They also mailed this to my work address not my home were they had a sheriff serve me notice the first time. I use my home address on the money orders that are sent.
I am sorry I am not sure I understand exactly what happened. Are you dealing with a legitimate collection agency here? Have you researched to find out if they are licensed and registered in your state (if that is required)?
i got call from lawyer office saying you do not want go court do you . will when last amount my unemplyed and i am try get ssd how can i pay you and what a judegment
I had a collection agency call me would not give me the name of the company. I had two calls from them both numbers i googled and came back as a technology company. When I called one number I asked for the fax as I wanted to send they a fax from the FTC to stop calling they asked for my name and I said I did not have to disclose that to them and they refused to give me the fax#. And hung up on me. They have also called my mother and daughter. The original debit has been written off buy the company. I did have a complete with the attorney generals office.
Well, I have a debt (auto loan) that defaulted several years ago during a long stretch of unemployment and eventually resulted in garnishment, beginning in 2011. For whatever reason, the creditor was very lax in renewing the 60-day garnishments (per WA state law), and the interest has accrued to such an extent that I believe it is impossible for this debt to ever truly be paid off. Fast forward to last year, when this company suddenly began texting me for ‘settlement’ offers, usually every 2 months or so. The terms keep changing (of course), and now — as my family is on the verge of moving to a new rental house — I get a text saying, and I quote “I need to speak with you about possible changes that may affect your ability to pay for the new rental.” Excuse me? I’ve survived the intermittent garnishment just fine…however cautiously this woman tried to word it, this sounds like a threat to me. Am I correct? Any suggestions as to how I might respond to this?
Hi Gerri, I had an account that I opened probable in 1993, and it went to collections probably in 1999. I struggled financially in that time while I was going full time to school. Once I started working again, I settled most of my accounts but this one because it was the highest debt. This account used to be on my credit report, and now a collection agency is calling my parent’s house to get information about me.
What are your suggestions?
Thanks
Have you made payments on this debt? If not, then I would imagine the statute of limitations has expired. What state do you live in?
Hi, Gerri! I’ve tried to settle an account with a company and they refuse to settle with me for lesser amount that I could afford (settle for 700, balance 1000). I offered to settle for 700, but they refuse and said that I would have a balance still and I’m liable. I also offered to pay between 10 to 50 dollars a month until it’s paid, but they said that they don’t have to accept it. They threatened to take me to small claims court for the total amount. If I send them a cashiers’ check of 500 dollars and a letter of settlement and they send it back, am I still liable for the rest of the balance?
Cheryl,
Unless the amount they say you owe is wrong, they don’t have to accept less than the full payment. Nor are they required to accept monthly payments that you can afford. However, are you certain you are dealing with a legitimate collection agency and not a scammer?
Hi, I just recieve a call from a private number, I answered it, and they guy said he was a process server, and he had my legal case at his desk, and If I wanted to find about the legal documents I needed to contact this 919-295-6121, I have 4 children, and I thought maybe I was being served for custody or something because i have NEVER been in trouble. I called the number some lady ask was my last 4digits such and such, I said no, you have the wrong person, so she said ok, the called me back saying No, she had the right person, they just had my ref# mixed up, and said I owed on a capitol one credit card from 2007, and I was like maam, I had a credit card back in 2002, the limit was 300, I do not owe 4,000 to captitol one. she then says she is marking this as a refusal to pay, and They will be sueing me, and I sound like a smart lady, do i want to be sued, or make payment arrangements, I said look No im not making arrangements, i dont even know is this is the same credit card from 2002, and No im not paying, then she hung up on me, I called back, she said there was no use for me, they were sueing me, and I want be broke all my life, so i cant run from the law forever??? I was amazed at these people. Im so lost, I have no clue if im being sued, wouldnt they have to serve me? and i never had a credit card open in 2007, maybe 2002 when i was 2o ish, im now 33years old, no credit card is listed on my credit report at all from the 2002 card i had. im so lost. she said this card last payment was made on jan. 2007, which means in 2014 that will not be valid, BUT I NEVER HAD A CARD IN 2007. EVER!!
I now live in Ga. she states the credit card was 10 years old at first in the inital converstaion, then when she hung up in my face and i called her back after reading online about state statutes, then she said the credit card last payment was made on jan 2007, and the credit card was issue in LA. which is a lie, the card from 2002, i never paid on, its not even on my credit report anymore.
She states she was from a laywers office, but i cant see lawyer being so rude, hanging up in your face, then telling you ( We will get the money after we garnish your back account, you cant stay broke all your life) the so called process server said ( maam you cant run from the law) when i was asking what in the world was he calling about.
So glad you didn’t fall for this!
Hi Gerri!
Is there any sense in paying a charged off account? I have paid 2 of those off and wondering if it was a bad decision since bad debt is bad debt.
I currently have 2 accts in collections, not charged off yet. Any sense in paying these off or just wait for them to “fall off?”
I’m getting married later in the year and wanted to clean upy credit, but it sounds like I shouldn’t worry about old debts since they will not effect my credit in a positive way.
I think I have made a HUGE mistake! Please help with some advice. I had a collection letter sent to my home in January for $1691.00 for Dental Services. Honestly, I thought my insurance had covered most of it and had paid them a lot of money I borrowed from my 401k back then. This was between 2004 and 2005. I got the collection letter and it said I could make payment arrangements because at the time I did not have enough to pay the entire amount within the 35 days. So I went online scheduled monthly payments thinking it would not be placed on my credit. Well it appeared today. It costed me 60 points off my credit score and now I am not going to be eligible for my home loan that I have been trying to get my credit score up for almost two years. I am devastated. I would have had the money to pay in full if I had to when I got my taxes back. But when I made the payment arrangements it didn’t say they would still put it on my credit. So I went on the website and now I see TERMS AND CONDITIONS: It states: that if not paid full within 35 days it will still be placed on my credit and until paid off it will be listed as Paid but they will NOT remove it. Any suggestions? I don’t want to not pay something I owe. I have not heard from this dentist office in 8 years. Please help!
Dee – Can you post a reply with who the collection company was you made this payment arrangement with online? What was the name of the company on the letter head of the collection mail you received, if different than the company website you were on when setting up payments? When did you make the first collection payment?
If you can post answers to these questions in a comment reply I may be able to help you with some feedback about your options.
Hi Gerri
I had an account in collections for a cell phone bill my sister had in my name. I tried to settle with them but they would not delete from my credit report. I since learned this month that the account is off my report and it has not been 7 years. Can this company put it back on my credit report since the account is not paid? I’m afraid to pay now because they might put it back on as a (paid collection).
Rochelle – I feel like I am missing some information here but I’ll respond as best as I can. If it has been less than 7 years and 180 days since your sister fell behind on the payments leading up to this account being placed for collection then yes it can be reported again during that time frame. However, why did they remove it in the first place? Are they still trying to collect? Has the statute of limitations (which is different than the reporting period) expired on this debt? (If you aren’t sure, what state do you live in?)
Hi ~
I have been contacted by a Collection firm in regards to me defaulting on my home alarm contract… Problem is that I was not contacted by the alarm company regarding the default prior… The contract clearly states that if I am in breach the contract that I will be notified by certified mail prior to default/termination. Second problem is that my alarm is still activated and working as of today… I have sent a dispute letter to the collection company asking for validation of the debtand recieved only partial of the infomation requested… Turns out that my account defaulted because my debit card expired and the automatic payments stopped. Also this company does not provide a monthly statement of acount, so I really had no idea of the nonpayment issue and the fact that my alarm is still activated… Help! how do you suggest I resolve this issue..?
You probably won’t get anywhere with the collection agency. So go directly to the alarm company. Insist they pull the account back from collections. If they refuse, tell them you will be talking with a consumer law attorney about a credit damage lawsuit.
Hi Gerri,
My wife worked out a payment arrangement with a debt collector and they have accepted this payment for the last 6 months. Today the phone calls began and we received a letter saying “This payment is not acceptable”. Can they change mid stream like this or have we established boundaries that indeed the payment is acceptable?
Hi Gerri~
Our family has a lot of medical bills; some of which have been turned over to collections, others still with various hospitals and doctor’s offices. Today I called one of the hospitals to make payment arrangements on a bill of about $400. The hospital refused to make any arrangements at all stating that they could not do so until the $285 bill that was turned over to collections was paid in full. I called the collection company who offered me three choices: pay the bill in full, pay half now, half next month or split the bill into three equal monthly payments. Because I have about $3,500 in outstanding medical bills, I offered to pay $25 or $50 per month and the representative I spoke to refused saying it would take me too long to pay it off. I asked her to please send me something stating that I attempted to make payment arrangements but was denied. She again refused. She started asking questions like “Where do you work?”, “What do you do?”, “Is the kids’ dad working?” And finally she wouldn’t even let me fnish a sentence so I hung up on her. I can’t believe I am willing to pay something each month and am being denied. What should I do? (we’re in Michigan)
Kelly – When an unpaid account is sent off to a collection agency by your original creditor or service provider, it is typically done on a contract. This will mean any payment arrangements will have to go through the assignment debt collector. It also means they may refuse payments if what you can afford is too small.
More often than not, your offer of a smaller payment would be successful if you were working with the medical service provider, or their direct billing agent.
You do not have to answer the debt collectors questions. As pushy as it sounds like things got, I am glad you hung up.
I would encourage you to:
Call the hospital and let them know that payment was refused when you offered what you could afford. Ask if the account will be pulled back at a certain time so that you can work with paying them direct.
If the account is not going to be pulled back anytime soon, commit to saving up your money until you are in a position to knock down the 285.00.
It sounds like there are other medical debts out there. You can also look to tackle another debt, and circle back to this one later on.
Have you put together a comprehensive outline of all of these debts and targeted money from your monthly budget that can applied over time to clear them all? If you would like some help with that, post a follow up comment reply with the balances and status of each debt. I will then have some questions for you to answer, followed by additional feedback.
My husband got sick and was out of work for three weeks. I called my credit card company to see if there was anything they could do to help and they said no. I made arrangements to pay the past due monthly fee and current fee on the 3rd and they won’t stop calling. What can I do to stop the calls. This is the first time I have missed a payment.
Carole – if it’s your first late payment the credit card issuer hasn’t sold the account to a collection agency (that doesn’t usually happen until the account goes 180 days late). This means that it’s the credit card company’s in-house collection department that’s calling and they don’t fall under the same guidelines under the Fair Debt Collection Practices Act as collection companies — it’s the lender calling, not a collector. The laws under the Fair Debt Collection Practices Act do not apply to in-house collections –which are typically the collection departments of banks, retailers, credit card issuers, etc. You can ask them to stop calling until you pay the bill on the 3rd (since that’s what you’ve agreed to), but you can’t make them cease the calls like you can with a third-party collector. What’s probably happening is that you’re in their automated “late” call queue and you’ll remain in the queue until the you pay on the 3rd. Very frustrating knowing that it’s your first ever late payment but if you can get caught up on the 3rd, the calls will stop.
Hi Gerri, I recently noticed an unpaid debt on my credit report with a debt date of 2013 – however when I called I was informed the account is from 2003 and was closed in 2004. I also received a letter from the collection agency with the amount but no details of the bill, only the original company. I called the phone company (turns out to be a home phone) but could not get specific information – only that the account is so old. I currently reside in TN but the bill is from GA.
My questions – what are my options:
1. the collection agency is reporting the bill as a NEW debt – is that legal?
2. given that it’s past the debt limitation statutes for both states (went to collection in summer 2004), am I obligated to pay this bill?
3. should I contact the credit report bureau to have the bill remove – especially since the date is INCORRECT?
4. send a dispute letter to the agency?
I know this is wordy/long but I wanted to make sure you have all the details.
PLEASE HELP!!!
Me and my boyfriend got took to court over a medical bill. We settled out of court. Never got seen by a judge or nothing. Talked to the lawyer that was there to collect the debt and made arrangements to make 50 dollar payments on a 600 dollar bill. We have got all the check stubs showing where we paid it. They are now sending us letters and calling saying we owe them 7 to 800 dollars for court cost. Can they do that to us when we settled out of court on a certain amount and even signed an agreement saying that’s all we owed?
My sister’s husband died recently. She has been calling creditors trying to get a little relief for the debt owed. One company (Bank of America) tells her she is a cosigner on the card – however she is sure she is not. She asked them for proof. They replied saying there was record of her calling on the account. This is definitely not true. Then they stated they don’t keep records from that far back. Now, the bills are coming to her house in HER name. How can I help her? The sudden death, as I am sure you are aware, has been very hard for her as it is.
If writing a letter is what you think she needs to do since the people on the phone are not willing to help, what should she say?
Thank you in advance for your help.
Has she pulled copies of her credit reports? Before taking the BofA representative’s word for it, the easiest way to tell if she’s a co-signer or joint account holder is to find out how the account is being reported in her credit reports. If she’s an authorized user, she has no legal liability for the account and can simply dispute the account and the bureaus will remove it from her credit reports.
If she’s listed as a joint account holder or co-signer, it’ll be much more difficult to prove she’s not unless she has some sort of documentation or evidence that says otherwise. This doesn’t mean all is lost, however. If she’s sure she was never on the account (either jointly or as a co-signer), her best bet in fighting it would be to consult with a consumer law attorney. At least with an attorney, they can request evidence to have data for past credit reporting information to be subpoenaed (which would show whether or not the account had always been reported that way or if it was updated after her husband’s death). An attorney would also be able to advise her on whether or not she has a strong enough case against BofA. A good place to start would be the National Association of Consumer Advocates at http://www.naca.net/.
Please do keep us posted and let us know how things turn out.
my wife having medical collection in my name I called Kaiser and its my wifes medical collections I got paperwork saying it’s my life what they put it underneath my name in collection now if I get that clear off can they put it back on since is my wife’s collection not mind
I got medical collections in my name the medical collections are not mine they are my wifes collections I got paperwork from Kaiser saying they are my wifes medical collection now can I take them off my collection credit report and never go back on again or the collection will put them back on my report
can my wife Medical collections go on my credit report and I have a wart saying they are my wife collections and not mines can I take them off and never get them back on again by the collection agency
I had a serious car accident that left me in financial difficulty. I have made an agreement with all of my credit card companies except for 2. one of the companies I pay just the interest with $1.00 coming off of the principle a month and the other keeps hounding me. I was caught up with the one that keeps calling me but they only have a hardship program lasting 1 year so all of those payments were probably for nothing.. Meanwhile I have been unable to use any of my credit cards in over 7 years. Someone told be there was something called the fact act which would not let my credit card company to file anything about being late with my payments. I am told it would be different if I was still able to use the card but since the company cancelled back in 2005 the fact act would apply. Is this true??? Sincerely Jewell
If you owe money to a company and have paid them on a regular basis for many years, and they canceled your card over 8 years ago but continued to pay and then were unable to pay them on a regular basis or would be late on a regular basis can they affect your credit score or would something called the fact act keep them from being able to report. I do continue to pay them but because of my health situation I will never be on time. Sincerely, Jewell
Hi Gerri, I have a friend whose mother was a shopaholic with the home shopping network. She is now a “Ward of the State” and in a nursing home. There is no way the mother can pay the amount or anything for that matter. We have written a letter to the credit card company but they just sent a letter saying they want payment in full. Is there any way to not pay this as her daughter doesn’t have the money. Thanks for any insight you can give me to help her.