10 tips for dealing with debt collectors

Debt collection is big business and because of its potential impact, the government has established very strict rules about how it should be done. Clearly, as we wrote in our story about the aggressive tactics collectors sometimes use, not every company plays by the rules.

Here are some tips for dealing with debt collection and understanding the rules:
  1. Debt collection calls have limits. Collectors can't call before 8 a.m. or after 9 p.m. or at your work, if you've told them not to contact you there.
  2. Don't ignore a debt collector, even if you don't believe you're responsible for the debt. If, after speaking with the collector, you don't want to be contacted, the Federal Trade Commission advises that you send a letter by certified mail with a return receipt. After that, they can't contact you again except under very specific circumstances such as filing a lawsuit against you. This letter won't clear the debt, just stop them from calling.
  3. Debt collectors can contact others about your debt, but only to find ways to contact you. They may not discuss your debt with anyone but the person who owes the money, their spouse or their lawyer.
  4. After you've been called by a collector, they are required to notify you within five days in writing with a statement of what you owe and a means to object if you dispute the debt.
  5. Debt collectors are forbidden from harassment or abuse, including using threats, obscenities and repeated phone calls.
  6. Debt collectors are forbidden from misrepresenting who they are, what you owe and that owing money is a crime.
  7. Collectors cannot charge interest above what is permitted by state law.
  8. Garnishment is allowed only if you are sued and lose and the court orders that action.
  9. You can sue a debt collector for violating the Federal Debt Collection Practices Act for both damages suffered by their acts and for simply violating the rules. You can recover actual damages and up to $1,000, plus court costs and attorney fees if you win, even if you didn't suffer a specific loss due to the collection activity.
  10. If you have a complaint against a debt collector, contact your state attorney general and the FTC.
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