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.
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).”
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