October 26, 2017 | Posted in:

Fair Debt Collection: Know Your Rights When Debt Collectors Come Calling

At some point you may be on the receiving end of a debt collection phone call. It could happen any time you are behind on paying your bills or when there is an error in billing. In the U.S. there are strict rules in place that forbid any kind of harassment.


“The Fair Debt Collection Practices Act outlines the rules that debt collectors must follow. If debt collectors violates these laws, they can be hit with substantial fines and penalties, explains Ren Cicalese III.


If you know your rights, you can deal with debt collection with minimum hassle. Following are some suggestions.


Ask for non-threatening transparency.

When a debt collector calls, they must be transparent about who they are. The magic words they must utter are: “This is an attempt to collect a debt and any information obtained will be used for that purpose.” In addition, debt collectors cannot use abusive or threatening language, or threaten you with fines or jail time. The most a debt collector can truthfully threaten you with is that failure to pay will harm your credit rating, or that they may sue you in a civil court to extract payment.


Know the contact rules.

Debt collectors may not contact you outside of “normal” hours, which is between 8 a.m. and 9 p.m. local time. They may try to call you at work, but they must stop if you tell them that you cannot receive calls there. Debt collectors may not talk to anyone else about your debt (other than your attorney, if you have one), but they may try contacting other people, such as relatives, neighbors or employers. This must be solely for the purpose of trying to find out your phone number, address or where you work.


Collection can include tax debt.

“Many states are now sending outstanding tax debt to collectors. If you’re contacted by a tax debt collector, it’s important that you alert your CPA so that he or she can help you determine the next step,” advises Ren III.


Take action.

If you believe the debt is in error in whole or in part, you can send a dispute letter to the collection agency within 30 days of first contact. Ask the collector for their mailing address and let them know you are filing a dispute. They will have to cease all collection activities until they send you legal documentation verifying the debt.


Tell the callers to stop.

And, whether you dispute the debt or not, at any time you can send a “cease letter” to the collection agency telling them to stop making contact. You don’t need to provide a specific reason. They will have to stop contact after this point, though they may still decide to pursue legal options in civil court.


Be wary of fraudulent debt collectors.

“Beware of debt collection scams,” warns Ren III. “Con artists are often looking for way to cheat you out of money. Scammers will often call and threaten you with imprisonment. This is specifically prohibited by US law.”


If a debt collection agency is not following these rules, report them. Start with your state’s attorney general office, and consider filing a complaint with the U.S. Federal Trade Commission and the Consumer Financial Protection Bureau as well.
The information contained in this newsletter is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. For more information or for assistance with any of your tax or business concerns, contact our office at 856.667.4100.


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